Amazon Seller Insurance: Why You Need Amazon Insurance And Where To Buy It

Home » Blog » Amazon Seller Insurance: Why You Need Amazon Insurance And Where To Buy It

There is some confusion about Amazon’s insurance requirements for their sellers. When presented with the option to create an Amazon pro seller account, signing up for commercial general liability insurance isn’t obvious in the terms and conditions.

Sellers get worried about Amazon seller insurance because most assume that e-commerce insurance is complicated and expensive. Most insurance companies carry commercial general liability insurance which is affordable for the protection it provides.

Ask your current insurance provider if they have commercial general liability insurance or product liability insurance. They should be able to give you more information about the policies they carry.

Why Do You Need Amazon Seller Insurance?

Why Do You Need Amazon Seller Insurance

The protection of your business is the main reason Amazon wants their sellers with professional selling plans to have insurance. It provides protection from any unforeseen scenarios.

The need to sign up for an insurance policy comes as a surprise to new Amazon sellers. Understand that your Amazon store is a business. Technically it is your e-commerce business, and as a business owner, you need to do what you can to protect it.

Signing up for an FBA insurance policy is the best way to do that. Commercial general liability insurance is ideal because the policy will protect your company’s assets and cover financial obligations resulting from accidents, injuries, and litigations.

Imagine getting sued by a customer because of an unforeseen accident due to the use of one of your products. Owning an Amazon seller insurance policy will protect you and your business from legal fees, bodily injury, property damage plus settlements when being sued.

Of course, that is the last thing on anyone’s mind when selling products on Amazon!

But accidents do happen and in these modern times people file lawsuits for just about anything. As the saying goes:

“It is better to have it and not need it than to need it and not have it.”

If your business is set up as a partnership and not an LLC or corporation then when someone sues your company, they can sue you for your assets as well. Make sure to set up your Amazon business as corporation or LLC for additional protection.

Who Needs Amazon Seller Insurance?

Who Needs Amazon Seller Insurance?

Amazon wants their pro sellers to purchase general liability insurance which will:

“…cover up to $1,000,000 per occurrence and in the aggregate and must include products liability, bodily injury, or personal injury, property damage and other requirements as stated in the Amazon Services Business Solutions Agreement. The insurance must indicate that “, Inc., and its affiliates and assignees” are added as insureds.”

While Amazon wants their pro sellers to have commercial general liability insurance, they do not require it for everybody. If you are an Amazon seller that holds an individual seller account, you are not required to purchase this kind of insurance.

For Amazon pro sellers that do not hit the insurance threshold amount then you are also not required to purchase this type of insurance. The insurance threshold amounts are as follows.

  • Ten Thousand U.S. Dollars ($10,000) (if the Elected Country is the United States).
  • Ten Thousand Canadian Dollars ($10,000) (if the Elected Country is Canada),
  • One Million Japanese Yen (¥1,000,000) (if the Elected Country is Japan),
  • One Hundred Thousand Mexican Pesos ($100,000) (if the Elected Country is Mexico),

However, if you are just starting out on Amazon or do not make the $10k per month, you may still want to consider getting FBA insurance. Once you hit the $10k threshold for three months, then you are required to have insurance.

Get the ball rolling

Whatever your product is, an accident might still happen. If someone gets hurt, they could end up suing you for everything you have. Take the time and look into getting an insurance policy for your business. It’s better to have all your bases covered even if you are starting out.

While you’re looking for the best insurance company to buy a policy from; ask them about adding additional riders/liability policies. Check if they have an Amazon suspension policy or online sellers policy which would cover you in case you end up with your Amazon seller account suspended.

A business auto insurance policy will cover automobile use during company hours. An excess liability insurance policy would help cover additional judgments in excess of what your original commercial business liability insurance would cover.

For better coverage, tell your insurance advisor how you run your business. They can then give you recommendations for your insurance needs.

How To Get Amazon Insurance and FBA Insurance

How To Get Amazon Insurance and FBA Insurance

Signing up for Amazon seller insurance is as simple as contacting your local insurance company. Give them a call or visit their website and ask about commercial general liability insurance/ general liability insurance or product liability insurance.

Be prepared to answer questions truthfully about the products you sell on the Amazon platform. The type of product you sell and its corresponding product category are the main factors for how much your annual premium will be.

In case you do not want to contact each insurance provider yourself to get the best quote, check out Insureon or Well insurance. They are independent insurance companies that can give you quotes from multiple insurance companies. Use them to find the best prices with maximum coverage.

When requesting quotes from independent insurance companies, you will need to provide vital information about your business.

The insurance application form will request details such as your business name, its operations, plus history, annual revenue, business partners, history of insurance and prior claims. You will be asked if you or your business partners have been convicted of a felony.

Ask your partners to provide you with this information for insurance purposes. Once you have completed the application, then you will receive quotes for how much your annual insurance premium will be.

That’s all there is to it!

After that, merely choose which quote you want and pay the premium. The average for commercial business liability insurance is around $500 per year. That is a pretty good deal for all the protection it provides your business.

Your Amazon Insurance Is Sorted!

Protecting your growing e-commerce business with an FBA insurance policy or Amazon seller insurance policy is critical to its continued success. In this day and age where consumers sue anybody for obscene amounts, it just makes sense to shield yourself from any possible scenario that can ruin your business.

If you think you’re not ready to purchase insurance since your Amazon business is still new, then make buying it a top priority. You don’t want to end up in a position where you lose everything you worked so hard for!

5 thoughts on “Amazon Seller Insurance: Why You Need Amazon Insurance And Where To Buy It”

  1. Hi ,
    I’m planning to start my online business with amazon FBA , so I’m wondering if i can start without an insurance with an amazon pro seller and leaning to do it afterwards soon as Start making a profit .
    many thanks
    lyes . T

  2. Please send me seller insurance email id . I missed the email id . I want to send the
    Copies of GST certifcate, Pan card and driving licence.

    Thanking you,

  3. I am an Amazon FBA Seller based in the UK with a Limited company, but who will be selling our Private Label products on Amazon USA. We seek commercial general liability insurance


Leave a Comment