Do I need insurance if I sell on Amazon?

Posted by Damian Roberti on

Do I need insurance if I sell on Amazon?

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Do I need insurance if I sell on Amazon

It does not matter if you are just starting out as a third-party seller on Amazon or if you have been doing it for years: it is essential to protect yourself with Amazon sellers insurance and to be aware of the circumstances in which it is required.

There are certain sellers on Amazon who are required to maintain active insurance, and you may be asked to provide a certificate proving that you maintain such coverage. In this essay, we will discuss everything you need to know about the insurance requirements imposed by Amazon, such as the following topics:


Do I need insurance if I sell on Amazon
Do I need to have insurance if I want to sell things on Amazon?

If you are a seller on Amazon with a Pro Merchant account and your monthly sales have been at least $10,000 for three consecutive months in a row, it seems as though Amazon is obligated to require you to have business insurance.



Why does Amazon require such a high level of insurance protection? They wish to reduce the likelihood that they may be sued in the event that whatever you sell through their marketplace causes injury to another person or damage to their property.

Do I need insurance if I sell on Amazon

Do I need insurance if I sell on Amazon


Even if you aren't required to have insurance, it's a good idea to get it anyhow so that you're covered in the event that someone gets hurt or something is damaged because of your product.



We've all heard terrifying tales about devices that can be harmful to youngsters. This occurs on a regular basis, even with products that aren't given a lot of attention by the media.


Do I need insurance if I sell on Amazon


The good news is that your insurance can, in most cases, shield you from monetary damages that might occur when you conduct business on other websites or in stores.



Amazon vendor insurance requirements
Find out everything you need to know about purchasing an insurance plan that satisfies the Amazon seller state regulations for Pro Merchants in the following guide.



You are required to have insurance for liability.
To be considered a Pro Merchant on Amazon, your liability coverage needs to be at least one million dollars per occurrence and one million dollars in total.



Your insurance plan (or plans) are required to cover the following:
Accountability for manufactured goods
products/operations that have reached their conclusion

 

 

Do I need insurance if I sell on Amazon


Bodily injury

Personal harm occurred as a result.

A great deal of property was harmed.

Agreements that encompass a great deal of territory

It is essential to keep in mind that general liability plans often cover bodily harm, personal injury, and damage to property, but product liability is not necessarily included in those coverages. At NEXT, we incorporate it into each and every one of our plans that cover general liability.



Include Amazon on your list of companies that are insured.

When you purchase insurance, one of the requirements is to name Amazon and its subsidiaries or affiliates as "additional insureds" on the policy. That does sound like a lot of insurance language, and you are absolutely correct in thinking that.



In essence, it denotes that if someone sues Amazon as a result of whatever you did, your insurance provider will foot the bill for it and cover their legal fees.

Do I need insurance if I sell on Amazon



Because they are named as an additional insured on your policy, it would assist pay for their defense in a lawsuit as well as any settlement they could receive, up to the aggregate limit of the policy, provided that the action was against you.



Show evidence that you are covered by the policy.

It's possible that Amazon will require you to register your insurance policy with them. In the event that this occurs, you must mail it to Amazon at the following address:







Before you begin selling on Amazon, you should familiarize yourself with the company's insurance policies and other prerequisites by reading the Amazon Services Business Solutions Agreement as well as the Amazon Program Policies.
It will assist you in determining what it is that you ought to anticipate as a seller

If you plan to sell on Amazon, you need safeguard your company financially by purchasing insurance.

Do I need insurance if I sell on Amazon


Why is it necessary for those who sell items on Amazon to have insurance?

Amazon does not want to be held liable for products that do not function properly or for legal action brought on by dissatisfied customers. As a result of this, they mandate that retailers that have a Pro Merchant account and a minimum of $10,000 in annual gross sales purchase insurance.


Do I need insurance if I sell on Amazon


However, keep in mind that even though selling on Amazon is not contingent upon having insurance, you should still consider purchasing it anyway as a prudent precaution. Should anything go wrong, having insurance can assist protect your financial stability.



This is the method.



Let's imagine a customer buys your face serum, then experiences a severe allergic response that forces them to go to the hospital and leaves them with a mountain of medical costs to pay as a result of their visit.



Or the battery of a remote-controlled car that you sell explodes in the living room of one of your customers, setting fire to the carpet and the sofa, both of which will need to be replaced as a result.



If you have insurance and a customer sues you to pay their medical bills or replace damaged property, the insurance company will help pay to defend you in court and will cover any settlements you win. If you do not have insurance, you will be responsible for paying the customer's medical bills or replacing their damaged property. Or, your insurance provider may be able to assist you in finding a solution to the situation that does not involve going to court.



If you do not have insurance, you will be responsible for paying all of the associated charges out of pocket, which can be quite costly and result in a financial loss for you.



It's always preferable to err on the side of caution, even if the product you're selling doesn't present much of a threat.



Keep in mind that even if you haven't committed any wrongdoing, another person can nonetheless sue you for damages. Moreover, regardless of the frivolous nature of the action, your insurance company will contribute to the cost of defending you in court.

 

 

 

Do I need insurance if I sell on Amazon

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