Do Sellers Need Insurance To Sell On Amazon?

Do Sellers Need Insurance To Sell On Amazon?

Many sellers would not be aware they’re required to carry Product Liability Insurance in order to sell on Amazon. They don’t realize that Amazon is not accountable for a seller’s mishap - that it’s up to you as a seller to protect yourself from litigation, accidents, or injuries.

What Type Of Insurance do Amazon sellers need? 

Product Liability Insurance is designed to protect your brand from claims that one of your products caused injury or damage to a customer. This type of insurance will cover your customer’s medical bills, plus it might also cover your legal fees from a lawsuit, thus saving you a LOT of money! 

At the moment, Amazon sellers earning more than $10,000 must have General Liability Insurance cover, and there are specific criteria that should be met. However, even if you’re not an Amazon Pro Merchant, you really should consider getting insurance coverage. You’ll be so glad you did if something should go wrong! It’s not very likely that an Amazon customer will become litigious, but you should always be prepared. (Make sure you adhere to the Amazon Product Liability Insurance requirements as closely as possible).

So, the answer to the question “Do Sellers Need Insurance To Sell On Amazon” is: Yes, Amazon does require that some third-party sellers provide proof of General Liability Insurance - with a minimum of $1 million in coverage. Amazon may also request a Certificate of Insurance with Amazon added as an additional insured.

 General Liability Insurance coverage meets the insurance requirements of Amazon. Getting a quote, purchasing insurance coverage, and accessing your certificate are all very easy when you use our simple online process.

Make sure you choose the ‘Pro’ package. This will ensure you receive the following –

$1 million per occurrence

$1 million aggregate limit - per year

Damages and Injuries coverage - as required by Amazon.

Should you be accused of causing property damage or injury related to a product you’re selling, both your business and Amazon will be protected from financial losses. Amazon does request that ‘, Inc. and its affiliates and assignees’ are added as additional insureds on your insurance policy. This means that a Certificate of Insurance will be created at the time of purchase when you buy goods through Amazon.

Amazon Insurance:

Sellers have until September 1, 2021, to comply with the Amazon Product Liability Insurance requirements. Note that this is not a new requirement, but Amazon has recently faced some item-related lawsuits, which prompted the retail giant to enforce its sellers’ insurance requisites. Pro Merchant Accounts have been required since at least 2010. 

As it stands at the moment,  Amazon will cover all sellers up to $1000 for any claims made against sellers.

Who Is Required To Have Amazon Covered Insurance?

Pro Merchant Accounts with gross proceeds from transactions that exceed applicable insurance thresholds during each month over any three consecutive months are required to have Amazon covered insurance. This also includes foreign sellers.

The insurance thresholds are -

$10,000 USD

$10,000 CAD

$100,00 MXD

This means that if you sell more than $10,000 over three consecutive months in a one-year period, you’ll need $1 million in insurance coverage. 

The type of insurance you require is called Commercial, General Liability, Umbrella or Excess Liability Insurance coverage. Your insurance must include coverage for product liability, bodily injury, personal injury, and property damage. It should be noted that most insurance claims cover personal and property damage but don’t include “product liability.” Check current plans to make sure you have that covered.

So, how much is this insurance going to cost? The average cost is typically between $500 and $1000 per year. Most insurance companies offer this type of insurance, but make sure you tell them it’s for Amazon because they have some very specific requirements. You can get multiple quotes from Insureon, but again, tell them it’s for Amazon. Some Amazon-only insurance agencies include Well Insurance, Next Insurance, and Bunker Insurance.


There are some Amazon insurance requirements you must pay attention to, including –


1. Your legal entity on Amazon (not the same as your store name) MUST match the name provided to Amazon.

2. You are required to give Amazon a 30-day notice of cancellation, non-renewal, or modification to your insurance policy. Don’t assume your insurance agency will do this on your behalf.

3. Your insurance policy must include “, Inc. and its affiliates and assignees”.

4. Any deductible must not be greater than $10,000 and must be listed out.

5. Your insurance policy must cover all products you’re selling on Amazon.

6. Your insurance coverage must be valid for at least 60 days from the date of submission. 

7. You must provide Amazon with a Certificate of Insurance - not just a quote.

8. Your insurance must be called Product Liability Insurance.


Message to International Clients

Your insurance should be purchased in your own country, but it must have global product liability coverage. It should also have global claim-handling capabilities and an ‘A’ Rating from S&P. If that rating isn’t available in your country, you can get a local equivalent.

If you need assistance, a company called MARSH will be able to help you get this insurance.

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