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Amazon Seller Insurance

Customized business insurance coverage for Amazon sellers in USA

Product liability insurance for Amazon sellers provides financial protection for retailers from the risks and costs associated with third-party claims or lawsuits.

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Product liability insurance for Amazon sellers

Whether you use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) to deliver your products to customers, Amazon requires all sellers to carry insurance.

Product liability insurance is designed for any business that sells, manufactures, or distributes a product to consumers. It is essential coverage for online retailers, e-commerce businesses, and brick-and-mortar stores because it protects against claims alleging third-party property damage or bodily injury caused to the buyer by any product you sell, manufacture, or distribute.

Do I need insurance to sell on Amazon?

Yes. As of September 1, 2021, Amazon requires all sellers to carry liability insurance who earn more than $10,000 in monthly sales. Amazon seller insurance from 2autoinsurance helps Canadian retailers meet Amazon’s insurance requirements, including:

  • A policy with a limit of at least $1 million per occurrence and in aggregate covers liabilities caused by or occurring in conjunction with your business operations, including products, property damage, and bodily injury.
  • The insurance policy type can be either commercial general liability, umbrella, or excess liability and be occurrence-based.

Whether your business is a private label seller, wholesaler, or retail shop that uses Amazon or any online marketplace, including eBay, Etsy, and Wayfair, it’s vital to safeguard your company against any unknown risks that may arise.

What does it cover?

A complete Amazon sellers insurance package will generally include the following coverages:

  • Development Liability Insurance: 

        Development liability coverage is a must-have for retailers. It is typically composed of a CGL policy. It protects against claims alleging third-party property damage or bodily injury caused by a product you manufacture, distribute, or sell to a consumer.
Impairments covered by product liability are usually the result of a defect in the design, manufacturing, or marketing, such as an inaccurate label or a lack of security prophecies. Also, if you import or export products outside North America, check with your broker to ensure that the products meet industry standards.

  • Commercial General Liability Insurance (CGL): 

                                   You conduct your business online as an Amazon seller. 2auutoinsurance, best known as slip-and-fall insurance, protects you against the day-to-day risks of interacting with third parties, such as claims of bodily injury or property damage. However, CGL is an amalgamation of several coverages that are designed to allow your business to grow. Specifically:

  • Allocation contracts as per the Amazon insurance requirements
  • Event, cubicle, or trade shows to allow you to boost your business through additional sales channels
  • Landlord requirements
  • Cyber Liability Insurance:

              For any online business or Amazon seller, cyber liability insurance is one of the most critical coverages for selling products online, especially if you’re storing your customers’ data. Cyber liability insurance protects costs associated with electronic happenings, such as cyber-seizures.
For example, consider an employee who clicks on a malicious link and accidentally gives hackers entry to your customer database, compromising their economic data. In that case, cyber liability insurance could cover the cost of notifying your customers and repairing your data systems and any legal expenses resulting from a data breach. 

  • Commercial Property Insurance: 

                    If you store your product list in a location like a storehouse, have a brick-and-mortar shop, or manage your business from home, you need commercial property insurance.
Commercial property insurance protects your physical location and its contents (including your inventory) from insured risks beyond your control, like a fire, theft, or flood. It’s a typical incomprehension that home-based corporations are covered via a personal homeowner insurance policy. 

    Commercial property insurance allows you to get business interruption coverage, which reimburses the net income lost following an insured event. It may also protect overhead costs, employee salaries, and other costs associated with temporarily shutting your business. However, business interruption coverage does not cover income lost due to a pandemic, contagious disease, or government-mandated closure.

How much does it cost?

Amazon sellers can expect to pay anywhere from $1000 to $3000 per year for a commercial general liability insurance policy with a $2 million limit, but the precise amount you pay is based on several factors, including:

  • Your business’s location
  • The products you sell
  • Your annual and projected revenue
  • Your years of experience
  • How many employees you have
  • Any previous insurance claims you may have made

How 2autoinsurance helps Amazon sellers in USA

Whether you use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) to deliver your products to customers, Amazon requires all sellers to carry insurance.

Product liability insurance is designed for any business that sells, manufactures, or distributes a product to consumers. It is essential coverage for online retailers, e-commerce businesses, and brick-and-mortar stores because it protects against claims alleging third-party property damage or bodily injury caused to the buyer by any product you sell, manufacture, or distribute.

Common claims scenarios

Problem: You ship a product to a customer as per their order. Whether it malfunctions or is used improperly, the customer sues you claiming bodily injury.

Outcome: Your product liability coverage may cover any third-party bodily injury claims, including medical expenses, as well as any legal fees you face to defend yourself. The act of litigating this claim could get very expensive. It could be settled in a different currency than Canadian dollars depending on the jurisdiction in which the claim is brought against you. In many cases, the act of an allegation is potentially financially ruinous, even if the claim is without merit.

Problem: A flood significantly damages your home-based business, including your inventory, technology systems, and the property rendering it uninhabitable.

Outcome: Your commercial property coverage may cover the costs to repair your workspace and replace its contents. If you also have business interruption coverage, it can reimburse the income your business lost when closed while repairs were underway.

Problem: Your company’s servers that store your customers’ information is hacked, and your customers’ financial data is stolen.

Outcome: Your cyber liability coverage may cover the cost to repair your technology systems and any legal expenses arising from the data breach.

Frequently asked questions

Yes. A customized Amazon sellers insurance package from 2autoinsurance is designed to cover the products you sell, design, manufacture, or distribute to consumers, whether a private label seller or a professional seller. Amazon sellers insurance protects you and your business from unforeseen circumstances, including legal fees and settlements and third-party property damage and bodily injury claims.

Every business is unique. Different Amazon sellers face different kinds of risks or liabilities. For example, if you have a warehouse where your inventory is stored, you may face more risks than a small, home-based business. Have a conversation with one of our licensed insurance brokers to assess your risk profile and determine the type of coverage your business needs.
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