Amazon Seller Insurance Requirements: MUST Know Info (2022)

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As an Amazon seller, there are several things you need to keep in mind when setting up your business and one of these is insurance.

Depending on the type of products you sell, you may be required to have certain types of insurance in order to do business on Amazon. In this article, we’ll cover everything you need to consider when choosing insurance for your business.

Who is required to have Amazon seller insurance?

Amazon pro merchants or holders of Professional seller accounts who are earning more than 10,000 USD per month in gross sales are required to maintain a commercial general liability policy. 

If you’re an individual seller, you don’t need to have any insurance to sell your products but it’s still recommended. 

What are the Amazon seller insurance requirements?

As a minimum, Amazon requires that sellers who have an Amazon Professional Seller account should obtain and maintain commercial liability insurance. Some criteria that your policy must meet are:

  • Have a minimum limit of $1,000,000 per occurrence and in aggregate, cover bodily injury, personal injury, and broad form property damage arising out of your products or business operations;
  • Covers all your available product listings on Amazon.com;
  • “Amazon.com Services LLC and its affiliates and assignees” should be named as additional insureds in the policy;
  • Insured name must match legal entity name
  • The business insurance provider must give Amazon at least 30 days’ notice of cancellation, modification, or nonrenew;
  • The insurance company provider must have global claim handling capability and a financial rating of A- or above by Standard & Poor’s.

Why do you need insurance to sell on Amazon?

As eCommerce sellers, there are a few reasons why you may need to carry insurance and have a certificate of insurance when selling on Amazon: 

To protect your business: You may have worked hard at building a successful business, but if something goes wrong with one of your products, you could be held liable. 

This could result in a lawsuit that could put your business at risk. Having insurance will help to protect your business in case of any damages or losses. 

To comply with Amazon’s policies: According to Amazon’s Program Policies, Amazon sellers with a Professional account and sales of $10,000 or more need to secure general liability insurance.

To give your customers peace of mind: When customers purchase products from you, they want to know that they are covered in case something goes wrong. Having the appropriate insurance coverage in place will give your customers peace of mind and help to build trust in your business.

What types of insurance are available for online sellers?

Amazon requires some Amazon sellers to have a certain type of Amazon seller insurance policy in place. Some types of insurance that you may need as an Amazon seller include:

General liability insurance

General liability insurance is also known as the commercial liability insurance policy or excess liability insurance coverage. Such insurance will protect you in case of any bodily injury, personal injury, property damage, and broad form contractual coverage that occurs as a result of your products or operations.

Product liability insurance

The product liability insurance will protect you in case one of your products causes injury or property damage.

This type of insurance is important if you are selling products that could potentially cause harm to people or property. Additionally, this covers any manufacturing defect with your product. 

Commercial umbrella insurance

The commercial umbrella insurance will provide extra liability coverage above and beyond your other insurance policies.

This could come in handy if you are sued for more than your other policies cover. 

Cyber liability insurance

Cyber liability insurance will protect you in case of any data breaches or cyber-attacks. 

This type of insurance is important if you are storing customer data on your computer or website.

Shipping and cargo insurance

Shipping and cargo insurance will protect your products in case they are lost or damaged during shipping. 

Amazon does not require shipping insurance, but it is highly recommended and helps give you extra peace of mind when shipping goods.

Business property insurance

This will protect your business property in case it is damaged or destroyed. This could include things like your inventory, packaging materials, and office equipment.

You can purchase these types of insurance from most commercial insurers or any local insurance company. Make sure to shop around and compare rates before purchasing a policy.

Some Amazon sellers choose to purchase an insurance policy that specifically covers them for selling on Amazon. These types of policies can be purchased from companies like Next Insurance or Insureon.

How much does an Amazon seller insurance cost?

The cost of insuring your business on Amazon will vary depending on the types of insurance you need and the coverage limits you choose.

The best way to get an idea of how much it will cost to insure your business on Amazon is to contact a few insurance companies and get quotes.

You can also inquire with insurance agents from insurance providers about the recommended insurance for your Amazon business

How to find the right insurance for your business?

There are many types of insurance available, and the best way to find the right policy for your business is to contact insurance companies and get quotes from a reliable insurance agent. 

It’s also important to understand the insurance limits or coverage and exclusions before purchasing a policy. Make sure you review your insurance policies regularly to make sure they still meet your needs.

Amazon also helps its sellers in finding the right insurance through the Amazon Insurance Accelerator. It’s a network of vetted insurance providers who will evaluate your business and recommend the right insurance for you. You can learn more about it here

How to upload insurance documents to Amazon Seller Central?

Once you purchase insurance, you have to request the certificate of insurance from the insurance provider. Once you get it, submit the certificate of insurance on Amazon Seller Central to provide proof. 

Here’s how to upload your insurance document:

  1. Log in to your Seller Central account and go to Settings.
  2. Select Account Info from the drop-down menu.
  3. Click the Business Insurance under Business Information.
  4. Enter your insurance info and upload your insurance certificate or document.
  5. Click Submit. 

You will need to renew your insurance policy on an annual basis and upload the new certificate to your Seller Central account. Amazon will send you a notification when it is time to renew your policy. 

What happens if you don’t have insurance when selling on Amazon?

If you don’t have the required insurance in place when selling on Amazon, you could be subject to penalties. These penalties could include a suspension of your account or removal from the Amazon marketplace. 

Takeaway

It is important to make sure that you meet seller requirements and obtain insurance coverage that is right for your business.

Not having the proper insurance in place could put your business at risk. 

Amazon provides some resources to help its sellers find the right insurance for their business.

If you want to get to know more about the best practices when launching an Amazon business, join us inside the Brand Builder University where hundreds of Amazon sellers have built their own successful brands.

Disclosure: This content may contain affiliate links that pay us a commission when you click on them, at no extra cost to you. View our affiliate disclosure.

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About The Author

Karizza Camus

Karizza Camus

Karizza has been part of the BBU team for several years having joined in an operations role and now helping create content for our community. She is detail-oriented and loves to help make complex tasks clear.

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