Amazon Seller Liability Insurance: Protect Your Business and Comply with Amazon’s Requirements

Starting September 1, 2024, Amazon will implement a key regulation requiring all sellers with significant sales to have liability insurance. When you first begin your Amazon business, you often don’t realize that Amazon mandates a liability insurance policy once you reach $10,000 in revenue in any given month. After achieving this $10,000 (5,000€ in Europe) milestone, you have 30 days to provide Amazon with a certificate of insurance, or your seller account could be suspended.

Tip: We recommend that you read Amazon’s Terms of Service before you decide to open an account and start selling.

Amazon Insurance Requirements for Sellers

To comply with Amazon's insurance standards, your policy must meet the following criteria:

1. Coverage:
   • Your insurance must provide a minimum of $1 million per occurrence and $1 million in aggregate, covering all liabilities related to your business operations, including product liability, bodily injury, and property damage.
2. Policy Types:
   • Acceptable policies include commercial general liability, umbrella, or excess liability insurance, which must be written on an occurrence basis to ensure claims coverage during the policy period.
3. Global Claims Handling:
   • Your insurer must be capable of handling claims globally and hold a financial rating of at least S&P A- or AM Best A- or higher.
4. Deductible:
   • The deductible (the amount you must pay out-of-pocket before your insurance coverage begins) must not exceed $10,000 and should be clearly listed on the Certificate of Insurance.
5. Sales Coverage:
   • The policy must cover all products listed for sale on Amazon.
6. Legal Entity:
   • The insured name must exactly match the legal entity name provided to Amazon.
7. Policy Validity:
   • The policy must be valid for a minimum of 60 days from submission and must be fully completed, including necessary signatures.
8. Notification Requirement:
   • Your insurer is required to notify Amazon at least 30 days in advance of any changes, cancellations, or non-renewals.

Regional Insurance Requirements: USA and Europe

United States

For Professional sellers or those with overall sales exceeding $10,000, obtaining Commercial General Liability (CGL) insurance is mandatory. The policy must meet the following:

• Coverage Amount: Minimum of $1 million per occurrence and in aggregate.
• Policy Type: Must be commercial general, umbrella, or excess liability and occurrence-based.
• Additional Insured: Include "Amazon.com Services LLC and its affiliates and assignees" as additional insureds.
• Insurance Provider: Must have a financial rating of S&P A- or AM Best A- or better, with global claim handling capabilities.
• Document Submission: Upload your insurance documents to Seller Central under Settings > Account Info > Business Insurance.

Europe

Insurance requirements for Amazon sellers in Europe vary by country:

UK: Required if sales exceed £4,000 per month for three consecutive months. 

Coverage: Minimum of £400,000 per occurrence and in aggregate.

France, Germany, Italy, Spain, Netherlands: Required if sales exceed €5,000 per month. 

Coverage: Minimum of €500,000 per occurrence and in aggregate.

Sweden: Required if sales exceed 50,000 SEK per month. 

Coverage: Minimum of 5,000,000 SEK per occurrence and in aggregate.

Poland: Required if sales exceed 22,500 PLN per month. 

Coverage: Minimum of 2,225,000 PLN per occurrence and in aggregate.

For all European marketplaces, the following applies:

• Additional Insured: Amazon and its affiliates must be named as additional insureds.
• Deductible: Must not exceed €10,000 or £10,000.
• Policy Type: Must be occurrence-based.

The Risks of Being Underinsured on Amazon

Failing to secure adequate Amazon liability insurance can have serious consequences. Even low-risk products can lead to liability claims, and non-compliance can result in:

• Amazon Account Suspension: Risk of suspension or termination due to non-compliance with insurance requirements.
• Financial Loss: A single lawsuit could jeopardise your business's finances.
• Limited Growth: Certain Amazon programs and promotions require insurance, limiting opportunities if underinsured.

Types of Insurance for Amazon Sellers

• Commercial General Liability (CGL): Essential for protection against bodily injury, property damage, and legal fees related to product liability.
• Excess Liability or Umbrella Insurance: Provides additional coverage beyond your primary insurance limits, extending protection across multiple policies.

Partnership with Segur eCommerce: Enhanced Insurance Solutions (only for Spain-based businesses)

We’re excited to announce our partnership with SegureCommerce, the leading provider of customizable insurance solutions for e-commerce businesses. With Amazon’s updated policies, securing proper coverage is more crucial than ever. Contact the 3fin team for more info, or SegureCommerce and say that 3fin sent you! 

Conclusion: Secure Your Amazon Business with the Right Insurance

Insurance is not just a regulatory requirement but a critical component of your risk management strategy. At 3fin, we provide tools and resources to help you navigate Amazon’s insurance complexities. Sign up at 3fin today and take the first step toward comprehensive insurance coverage that meets Amazon’s requirements and secures your business’s future!

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