By: Nick Varterian | July 30, 2022
July 30, 2022
Introduction to Amazon Seller Insurance
Amazon is the largest online retailer in the world, with tens of million sellers on its platform. In order to sell on Amazon as a third-party seller, you previously needed to have only general liability insurance. Now, however, Amazon is requiring sellers to have Amazon seller insurance policies that cover product liability and property damage. The insurance change will help protect customers from defective products and prevent sellers from passing those costs onto them. Sellers must provide the following information: carrier; specific policy name and coverage type; start date of coverage; expiration date of coverage and policy limit (Amazon). But what type of policy will you need? Continue reading to learn more about what you’ll need to know!
Why is Amazon Seller Insurance Important?
What is Amazon seller insurance? It provides protection against product liability and property damage caused by your products. If someone buys one of your items and hurts themselves or damages their home with it, this kind of insurance will help pay for their medical bills (or whatever other costs they incur). Amazon wants to assume less responsibility.
The Finer Details
If you are an Amazon seller with a Pro Merchant account and gross sales of $10,000 a month or more for three months in a row, Amazon requires you to have business insurance.
Liability coverage: You need $1 Million in liability coverage, per occurrence and in aggregate to meet Amazon’s seller insurance requirements for Pro Merchants. If you do not have this type of coverage already then you may need some help finding the right policy at an affordable price.
Insurance Policy Must Be a Business Policy
Of course, you can’t just provide any insurance policy to Amazon. The policies must be a business owner’s policy, not a personal one; if you are renting out a space for your small business, then your landlord will likely have an insurance policy that meets the requirements of Amazon sellers’ insurance. You will need to provide the name of the carrier and the policy number to Amazon so that they can review it to ensure it meets their requirements. If your insurance company has been approved by Amazon as a provider of sellers’ liability coverage, then they should know what type of policy they require from their clients before you even submit anything.
Whether you are a new third-party seller on Amazon or a pro that’s been at it for years, it is important to protect yourself with Amazon sellers’ insurance and know when it is required.
Provide Proof of Coverage
Let’s face it, Amazon is the biggest online retailer in the world. They are a household name and we all know them. But what do you know about their insurance policy? To be honest, they probably don’t even have one!
Amazon seller insurance is a critically important part of selling on Amazon as a third-party seller. In fact, failure to provide proof of coverage can result in account suspension or risk being removed from the marketplace entirely by Amazon. Sellers will need to provide the following information: carrier (insurer), specific policy name and coverage type; start date of coverage; expiration date of coverage and policy limit (Amazon seller insurance).
Why do I Need Amazon Seller Insurance?
Amazon Seller Insurance is a must-have for any Amazon seller. It protects you from liability, claims from customers, products and Amazon’s brand.
It also protects your business, reputation and employees.
Why Are These Policy Changes Being Implemented?
Why does Amazon more strictly require sellers to obtain insurance? The policy changes are being implemented to safeguard Amazon’s customers and brand while protecting its sellers from unexpected costs associated with selling on the site. It also protects Amazon’s reputation as a trusted marketplace where shoppers can feel safe buying from suppliers who meet certain standards.
Conclusion
We hope that this post has shed some light on Amazon seller insurance and the importance of having it. As mentioned before, Amazon requires all third-party sellers to have a minimum level of coverage in order to sell products on its site. If you don’t have an insurance policy that meets these requirements, then your account could risk being suspended until you obtain one. This is why we recommend getting ahead of the curve by contacting a recommended insurance company who can help explain how best suits your needs as well as explain any potential gaps in coverage within your current policy. Let the representative know you need Business Liability insurance for your Amazon business.
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