Understanding Amazon Business Insurance for Online Sellers

As an online seller on Amazon, it's essential to understand the ins and outs of Amazon Business Insurance. This type of insurance is specifically designed for Amazon sellers, and it's a crucial aspect of protecting your business.

Amazon Business Insurance is not a mandatory requirement for sellers, but it's highly recommended to have it to safeguard your business against various risks.

If you're an Amazon seller, you're likely aware of the importance of having the right insurance coverage for your business. Amazon Business Insurance can help you mitigate risks associated with selling on the platform.

Here are some key facts to consider about Amazon Business Insurance: it typically covers damages or losses to products during shipping, storage, or handling, and it can also provide protection against claims of product defects or liability.

Amazon requires sellers to have product liability insurance to protect themselves and their company's assets from accidents, injuries, or litigations. This is a crucial aspect of running a business on the platform.

You might think that Amazon would cover you in case something goes wrong, but that's not the case. It's up to you as a seller to have the proper insurance.

A recent case of a couple suing Amazon for faulty solar eclipse glasses is a prime example of why insurance is essential. The couple claimed the glasses didn't protect their eyes during the solar eclipse and ruined their vision.

Amazon Seller Insurance is a requirement for sellers exceeding certain sales thresholds. It's also necessary if you have a Professional account and use Amazon's Fulfilled by Amazon service.

Here's a breakdown of the insurance scope:

Note that Amazon's insurance standards ensure convenient order fulfillment for FBA sellers and protect Amazon's brand, reputation, customer experience, and warehouse functionality.

To meet Amazon's insurance requirements, you'll need to have Commercial General Liability (CGL) coverage with limits of no less than $1,000,000 per occurrence, $1,000,000 in the aggregate for products and completed operations, and $1,000,000 in the general aggregate.

This type of coverage includes products liability, products/completed operations, bodily injury, personal injury, broad form property damage, and broad form contractual coverage. You can satisfy the insurance limits by using any combination of CGL, Umbrella and/or Excess Liability insurance.

You must also add Amazon.com, Inc., its affiliates and assignees as additional insureds with the address "P.O. Box 81226, Seattle, WA 98108-1226." Amazon requires this specific wording to be included in your insurance policy.

Here are the types of insurance you may need as an Amazon seller:

Note that Amazon does not require you to have a Business Owner’s Policy or Cyber Insurance to sell on their platform.

What Kind of Insurance Do Amazon Sellers Need?

Amazon sellers require at least $1 million in liability coverage, per occurrence and in aggregate.

This coverage helps protect businesses and Amazon from financial losses if they're accused of causing an injury or property damage related to sold items.

Commercial General Liability (CGL) coverage is a must-have, with limits of no less than $1,000,000 per occurrence, $1,000,000 in the aggregate for products and completed operations, and $1,000,000 in the general aggregate.

The policy must include products liability, products/completed operations, bodily injury, personal injury, broad form property damage, and broad form contractual coverage.

Here are the specific requirements for Amazon seller insurance:

The policy must also be occurrence-based, with some wiggle room for specific product categories.

Commercial Auto can help you pay for repairs to your vehicle if you're involved in an accident while driving for work. This type of insurance can also cover medical expenses if you or your passengers are injured.

Commercial Auto typically covers vehicles used for business purposes, such as company cars or trucks. It's a must-have for self-employed individuals who use their vehicles for work.

If you're involved in an accident, Commercial Auto can help you pay for towing and rental car fees while your vehicle is being repaired. This can be a huge relief, especially if you're unable to work while your vehicle is being fixed.

Commercial General Liability Insurance is a must-have for Amazon sellers who hit the $10,000 monthly revenue milestone. This type of insurance covers bodily injuries and medical expenses, tangible damages like property damage, and intangible damages like libel or slander.

Commercial General Liability Insurance includes coverage for bodily injuries and medical expenses, which is crucial for Amazon sellers who sell products that can potentially cause harm to customers. This insurance also covers tangible damages like property damage.

Amazon requires sellers to have at least $1 million in coverage, which must include products liability, products/completed operations, bodily injury, personal injury, broad form property damage, and broad form contractual coverage. This is to protect both the seller and Amazon from financial losses in case of an injury or property damage related to the products being sold.

To meet Amazon's requirements, the policy must be written on an occurrence basis, have a global claim handling capability, and a financial rating of S&P A- and/or AM Best A- or better. The policy must also give Amazon at least 30 days' notice of cancellation, modification or nonrenewal.

Here are the key requirements for Commercial General Liability Insurance:

Amazon's A-to-Z Guarantee covers property damage and personal injury claims under $1,000, which accounts for more than 80% of cases.

To be eligible for this coverage, sellers must abide by Amazon's policies and hold valid, Amazon-approved liability insurance.

Amazon will directly pay customers for claims under $1,000 at no cost to sellers, and may step in to pay claims for higher amounts if the seller is unresponsive or rejects a claim believed to be valid.

As long as sellers hold valid insurance, Amazon will bear the costs and not seek reimbursement, ensuring customer protection in case of property damage or personal injury from a defective product sold through Amazon.com.

Claims coverage is a crucial aspect of selling on Amazon. Amazon's A-to-Z guarantee covers property damage and personal injury claims under $1,000, accounting for more than 80% of cases.

To qualify for this coverage, sellers must abide by Amazon's policies and hold valid, Amazon-approved insurance. This means that Amazon will bear the costs without seeking reimbursement from sellers who meet these conditions.

Amazon's advanced fraud detection system, combined with external insurance fraud experts, helps analyze claims and presents valid ones to sellers, denying unsubstantiated or frivolous claims.

Claims under $1,000 are typically resolved quickly, without impacting the seller's order defect rate. However, for higher amounts, Amazon may step in to pay claims if the seller is unresponsive or rejects a valid claim.

If you're selling high-risk products or don't meet Amazon's coverage requirements, consider Excess Liability or Umbrella insurance to extend your primary policy coverage.

Here's a breakdown of the types of insurance you may need:

By understanding Amazon's claims coverage and insurance requirements, you can protect your business and provide peace of mind to your customers.

Medical Payments Coverage is a type of insurance that covers expenses related to injury or damage that happens on the insured's property or as a result of their operations.

It applies irrespective of who's at fault, meaning you're covered even if the accident was caused by someone else.

This type of coverage is also known as MedPay, and it's designed to help you pay for medical expenses quickly and efficiently.

If you're dealing with a denied claim, don't give up. File an appeal within the specified timeframe to potentially have the decision reversed.

Review your policy documents to understand the process and deadlines for filing an appeal. This will help you stay organized and ensure you meet the necessary requirements.

Keep detailed records of all correspondence with your insurance company, including dates, times, and the names of people you speak with. This will be helpful if you need to escalate your case.

Take advantage of the free or low-cost assistance offered by your state's insurance department or a consumer protection agency. They can provide guidance and support throughout the process.

If you're struggling to navigate the claims process, consider hiring a public adjuster who can represent your interests and help you get the coverage you're entitled to.

The cost of Amazon business insurance varies, but on average, it's around $500-$1,000 per year. However, some providers offer policies as low as $300 per year.

Your quote will depend on your estimated annual revenue, which typically falls within 0.25% to 1%. This means if you have a revenue of $100,000, your insurance premium could be around $250 to $1,000.

The specific products you sell, business assets, and business size & income all play a role in determining your insurance costs. For example, selling high-risk items or having a large inventory can increase your premiums.

Here are some factors that influence your insurance costs:

Pay-as-You-Sell Amazon insurance is a game-changer for sellers who want to avoid overpaying for coverage they don't need.

This type of insurance model means you only pay for coverage on the exact number of units you sell, which is a big improvement over traditional annual policies that are based on forecasts.

With pay-as-you-sell, your premium auto-adjusts in line with last month's sales, so you can focus on scaling your business with peace of mind.

For example, Assureful offers flexible monthly premiums from $26/month, which is a fraction of what you'd pay for an annual policy.

This approach also helps you avoid the risk of being under-insured during peak sales periods, like Prime Day or Black Friday.

Here are some key benefits of pay-as-you-sell Amazon insurance:

Overall, pay-as-you-sell Amazon insurance is a smart choice for sellers who want to stay ahead of the game and protect their business without breaking the bank.

Amazon insurance costs can vary widely, but on average, you can expect to pay between $500-$1,000 per year, with some providers offering policies as low as $300 per year.

The cost of insurance for Amazon sellers is largely dependent on their estimated annual revenue, with quotes typically falling within 0.25% to 1% of that revenue.

Your business's product category, sales volume, and perceived 'riskiness' of the products you sell also play a significant role in determining your insurance costs.

For example, selling handmade crafts is likely to be cheaper than selling high-end electronics, and a solo Amazon seller will generally pay less than a bustling e-commerce store.

Your business assets, such as equipment and property, also contribute to your insurance costs, with more extensive inventories or sophisticated equipment requiring higher premiums.

As your business scales and your revenue increases, so does the potential liability, which can lead to higher insurance costs.

The type of insurance you opt for, such as basic liability or comprehensive umbrella policy, also affects your costs, as do policy specifics like limits and deductibles.

Here's a rough breakdown of the factors that influence Amazon insurance costs:

If you're just starting out on Amazon, it's essential to consider whether you should sell at all. In fact, selling on Amazon requires insurance to protect your business in case of unexpected events.

Amazon seller insurance can be a lifesaver in real-world scenarios, such as if you're involved in a product liability issue. A comprehensive guide to internet business insurance can help you understand the risks and benefits of selling on Amazon.

You don't need to break the bank to get started, though. Amazon seller insurance costs vary depending on your business size and scope.

Protection and risk are two sides of the same coin when it comes to running an Amazon business. You can't have one without the other, and that's why insurance is a crucial aspect of protecting your business.

Insurance for your Amazon business will vary depending on the type of products you're selling and the perceived risk level. This means that if you're selling high-risk items, you'll need to pay more for insurance.

There are several types of insurance policies available for Amazon sellers, including product liability insurance, seller suspension insurance, and FBA insurance. These policies can help protect you from financial losses in case your seller account is suspended or if you're found liable for a product-related issue.

Here are some common reasons why Amazon seller accounts can be suspended:

Amazon Suspension Insurance is a cost-effective policy that protects you from significant financial losses in case your seller account is suspended.

Amazon's insurance accelerator makes it easier and more affordable for sellers to obtain insurance, partnered with Marsh to offer a network of vetted insurance providers.

This means you can quickly obtain quotes and get insured fast, giving you peace of mind to focus on growing your business.

Insuranks is another great resource where you can compare prices for different insurance plans, find the cheapest quotes from top insurance providers, and make better decisions with transparency regarding pricing, reviews, and ranking.

Here are some Amazon-related insurance policies outlined on Insuranks:

With these options, you can have peace of mind and protect yourself and your Amazon business from potential risks.

Having Amazon Seller Insurance can give you peace of mind so you can focus on growing your business. It's not as difficult as you might think to get insurance for your Amazon business.

Insurance for your Amazon seller business will vary depending on the type of products you're selling and the perceived risk level.

To maintain the right coverage at the best possible cost, consider Assureful's monthly-billed and pay-as-you-sell insurance. This way, your premiums are calculated based on your actual sales, not annual forecasts.

Amazon sellers looking to purchase insurance can make better decisions by comparing prices on Insuranks, a marketplace where customers can compare prices for different insurance plans. It also offers educational information and reviews written by experts ranking various insurance companies, services, and agents.

Here are some common reasons for Amazon seller account suspension:

Amazon Suspension Insurance can provide financial protection in case your seller account faces suspension. This type of insurance functions similarly to traditional coverage for physical storefronts, protecting against loss of income.

Having Amazon Seller Insurance is often a prerequisite for participating in certain promotions or programs on the platform. Failing to follow Amazon Seller Insurance may result in the suspension or termination of your account.

Choosing a provider for Amazon business insurance can be a daunting task. It's essential to choose an insurance provider familiar with ecommerce policies and FBA insurance requirements. According to Amazon, your insurance provider must have global claim-handling capabilities and possess a financial rating of S&P A-, AM Best A-, or higher.

To ensure compliance with Amazon's exact requirements, inform your insurance agent beforehand that you're an Amazon seller. There are nuances to their rules, and discussing them with your agent is crucial. You can also use the Amazon Insurance Accelerator, a digital network of approved insurers that offers a pre-vetted list of insurance providers meeting Amazon's requirements.

Here are some key features of the Amazon Insurance Accelerator:

Choosing a provider for your Amazon seller insurance requires careful consideration. You'll want to choose an insurance provider familiar with ecommerce policies and FBA insurance requirements. Amazon requires your insurance provider to have global claim-handling capabilities.

Your insurance provider must also possess a financial rating of S&P A-, AM Best A-, or higher. If these ratings don't apply in your country, you can use a local equivalent for insurance requirements. It's essential to inform your insurance agent beforehand that you're an Amazon seller to ensure compliance with Amazon's exact requirements.

Amazon has collaborated with Marsh to simplify compliance and established the Amazon Insurance Accelerator. This digital network of approved insurers offers Amazon sellers a convenient way to find the best insurance product that matches their needs at competitive prices. Securing coverage through the Amazon Insurance Accelerator offers a pre-vetted list of insurance providers meeting Amazon's requirements.

You can access the Amazon Insurance Accelerator by going to your Seller Central account and choosing Settings > Account Info > Business Insurance. This page offers options like Well Insurance, Next Insurance, Simple Business Inc., Bold Penguin, and Bunker Insurance, and their online application process allows you to review policy options, purchase coverage, and obtain your certificate automatically.

Here are some key benefits of using the Amazon Insurance Accelerator:

Note that you can choose a provider outside the Amazon Insurance Accelerator as long as they meet Amazon's requirements.

Insurance Canopy is a great option for Amazon sellers, especially those with gross sales of $10,000 or more, as Amazon requires them to carry general liability insurance.

Insurance Canopy offers product liability insurance coverage, which protects against claims related to allergies, medical expenses, and injuries from defective products.

The company also offers general liability insurance with a coverage limit of up to $2,000,000, as well as products and completed operations liability insurance with the same limit.

Here are the specific coverage options offered by Insurance Canopy:

Insurance Canopy's coverage options are designed to help protect Amazon sellers' businesses in case of an incident, and it's worth noting that selecting the right insurance policy is crucial to avoid any voids in coverage.

Amazon requires sellers with gross sales of $10,000 or more to carry general liability insurance.

You might be thinking you're safe if you're not a Professional Seller on Amazon, but it's still a good idea to get coverage to protect your business if something goes wrong.

Amazon is a highly lucrative platform with a daily revenue of around $1.29 billion, but for uninsured sellers, it refutes responsibility for malfunctioning products or customer lawsuits.

Without insurance, you're left vulnerable, grappling with potential lawsuits and out-of-pocket expenses if a customer claims a product you sold malfunctioned and caused property damage.

More than a safety net, Amazon Seller Insurance is an emergency chute for turbulent times, helping with legal defense and settlements if customers file lawsuits against you.

Your coverage might even resolve the matter before it reaches the courtroom, which is a huge relief if you're not prepared to deal with the financial burden of a lawsuit.

Even if you sell low-risk items, insurance is still paramount, acting as an investment in security and a defense against complaints, product liability claims, and property damage that could otherwise jeopardize your business.