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Amazon Seller Insurance: Compare Quotes From $5

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Getting goods from e-commerce and digital marketplaces such as Amazon has become one of the most popular methods of acquiring products, because consumers can easily find what they need and compare prices online while sitting at home, as opposed to shopping in brick and mortar stores which is often time-consuming if not tiring. 

Amazon has at least 300 million customer accounts of people in different parts of the world. It also ranks as the leading online shopping platform in the United States. 

People, who see Amazon’s potential in reaching many customers, opt to become Amazon sellers instead of selling through brick-and-mortar stores. And as a requirement to continue selling,  Amazon asks for coverage as soon as a particular number of sales is reached. 

Are you an Amazon seller? That's great! How's business going? If it's going well, why don't you get Amazon seller insurance? Here's a guide that gives you all the essential information about this business insurance for amazon sellers.

What Is Amazon Business Insurance?

Amazon business insurance - also known as Amazon commercial insurance - pertains to different insurance policies that Amazon sellers need. Amazon requires sellers to have general liability and umbrella/excess liability with at least $1 million coverage per occurrence, and a $1 million aggregate limit. 

Nonetheless, the company isn’t unjust as it doesn’t force sellers to get insurance the moment they start making sales.   We’ll discuss when you need to avail Amazon seller insurance in the later part of this discussion. 

Why Do You Need Amazon Insurance?

The primary reason why you have to get Amazon insurance is that Amazon wants to get protected. Amazon doesn’t want to answer for the trouble of its sellers as there are thousands and covering for all will result in significant financial loss.

The second reason is to ensure that you are safe from risks. Amazon sellers getting sued isn’t impossible. As a matter of fact, it has already happened. For example, there’s the couple sued for $100,000, and they can’t afford to spend for legal costs as they recently bought a new house.

By the way, we know you think that lawsuits can only come from customers but that’s where you’re wrong. 

Take this piece of news we got from Amazon’s press center. According to the press release, Amazon and its subsidiary, Weber, filed a lawsuit against 12 sellers who tried to sell products using covers bearing the WEBER® registered trademark.  

Selling on Amazon is not as easy as you think, and it’s because the company constantly monitors all seller accounts to prevent the selling of  fraudulent and counterfeit goods. Monitoring is achieved using industry-leading tools to verify potential sellers’ identities and ensure that product listings are authentic.

So yeah, even as you’re selling right now, Amazon has its eye on the corners of your seller account, watching customer reviews and ratings of your products. 

Going back to the Amazon-Weber vs. Sellers lawsuit,  it’s interesting to ponder how much both parties will pay for lawsuits. 

If we use the American International Law and Property Association’s survey, it’s safe to assume that both defendants and the plaintiffs will have to pay $400,000 - $2,400,000. Amazon and Weber shouldn’t have trouble paying such an amount. However, we can’t say the same for the sellers, and let’s pray they have insurance coverage to make things better. 

What if the defendants lose? How much will they pay to Amazon and Weber for damages? We can only guess as the amount depends on what Amazon and Weber attorneys demand. But still, it is certain that it won’t be cheap as the plaintiffs are well-established companies.

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Amazon Seller Insurance Requirements

Amazon clearly states in its guidelines for sellers that insurance must be availed upon reaching $10,000 in gross sales(calculated by adding all sales receipts before discounts, returns, and allowances together). But still, the requirement isn’t as simple as it may seem. The bullet below shows all of the criteria you must meet.

  • The insurance policy must have a $1 million per occurrence and aggregate limit and must account for costs resulting from situations where the seller has a liability.

  • The insurance policy should take effect on a per-occurrence basis. 

  • The deductible of the insurance policy must not exceed $10,000 and be declared in writing in the seller’s certificate of insurance.

  • Sellers must opt to get general, umbrella, or excess liability.

  • Sellers in the US must only get insurance policies from carriers having AM BEST A- OR S&P A- rating. On the other hand, sellers not in the United States can turn to their local insurance companies whether or not rated by AM BEST or S&P.

  • Amazon, affiliates, and assignees must be listed in the insurance policy of the seller as a additional insureds.

  • In case of non-renewal, modification, or cancellation of the insurance policy, the seller must coordinate with the insurance carrier to notify Amazon 30 days before such actions happen. 

  • The policy must provide coverage or cover all the products of the seller. 

  • The insurance policy must take effect within at least 60 days.

Are you having trouble understanding Amazon's insurance requirements? If so, our insights below might help you get the gist of it.

  • Your amazon insurance can only come from carriers with a good reputation, such as NEXT, Prudential, TransAmerica, Progressive, and The Hartford. Good news is that you can compare quotes online from all these companies and other Amazon eligible carriers by clicking the 'Get Quotes' button at this page and completing the questionnaire.

  • Amazon asks to be an additional insured. So, go for a carrier that allows you to add additional insureds and free of charge.

  • If you’re selling more than one type of product on Amazon, you might have to get multiple insurance coverage. 

  • Rates of insurance that you’ll buy for Amazon won’t be costly as the deductible is hefty.

  • A carrier with good customer service will be very valuable as Amazon wants to be updated whenever you do something with your policy. 


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Amazon FBA Insurance

Before we define what Amazon FBA insurance is, let’s understand Amazon FBA first to make things simpler. 

FBA stands for Fulfillment by Amazon. It’s a program that aims to help sellers, who enroll, deliver products with better efficiency to customers. The program does this by providing access to Amazon’s logistic network.  Simply put, all that sellers have to do is send and store stocks in Amazon’s warehouses, then the company will handle the receiving, packing, shipping, customer service, and returning. 

Amazon FBA insurance is an insurance policy tailored to the needs of sellers using FBA, Prime, Pro, and Pro Merchant seller accounts. What makes this insurance special is that its policies play around with the requirements mentioned above. And so, there’s a lesser chance of Amazon informing the seller that the insurance bought doesn’t match the criteria.

Complying with Amazon FBA insurance requirements is easy as carriers will do all the work of finding the insurance policies you need that comply with Amazon guidelines.  And so, all that you have to do is follow up now and then to know when your policies are up and ready. 

With that said, if you don’t want to engage in lengthy talks with an insurance agent to make sure that your policy matches Amazon's requirement, get Amazon FBA insurance because it’s a ready-made policy addressing your needs as a seller. 

Amazon Liability Insurance

General liability coverage is the policy that you should prioritize getting as an amazon seller. This insurance will provide funds for claims made by a client because of the following:

  • The client sustains injuries while in the premise of the building where you're storing stocks
  • A product , though not necessarily defective, causes  property damage upon being used by the client
  • A client decided to get lawn mowers from your Amazon store and wanted to see the products for themselves. Upon testing, the client mishandles the products and suffers from a mild cut. 

One thing to remember is that general liabiltiy coverage will only account for claims made by a client. So what insurance would cover the injuries sustained by Amazon personnel getting your goods to be shipped? If you want coverage for them, we suggest you get public liability insurance. 

Amazon General Liability Insurance

Amazon general liability insurance provides coverage for property damage and bodily injuries caused by the products and services of the seller.  This insurance accounts for the payment of settlements and legal costs filed by a client, an employee, a business partner, or a customer. 

Amazon seller’s general liability insurance, which provides $1 million coverage, is  $23 - $59 a month. Price is determined according to the following factors:

  • Location

  • Type of products

  • Source of the products

  • Gross sales

  • Experience

Excess Liability Insurance

Excess liability insurance is an insurance policy that’s part of a general liability policy. It gets into action when your general liability is all used up, meaning that it has already reached its limit. Here’s an example:

Due to a defective product, you’re required to pay your customer $2 million in settlement.  Your general liability only has a coverage of $1 million. And so, there’s still $1 million left to pay. This remaining amount will be paid by excess liability provided that you have it prepared."

An excess liability policy is a type of Amazon liability insurance that's added to general liability, professional liability, product liability, and more. However, what’s important to remember is that it can only act as a backup for one policy, meaning that multiple liability policies can’t have one same excess liability policy as an additional option for more coverage. This example will help you understand:

“A certain businessman has a general liability policy offering $1 million in coverage, which is added with excess liability. He also has product liability offering coverage of the same amount but without excess liability. 

By some stroke of bad luck, this businessman is asked by the court to pay $1.5 million to a client who received a defective product. Even so, the businessman in question didn’t have qualms paying the amount as he has general liability coverage with excess liability. Upon paying using insurance, the businessman’s general liability coverage is all used up while his excess liability still has $500,000 left.

This businessman must like giving defective products as another client filed a claim demanding $1.5 million as settlement. Now, the businessman turned to his product liability to cover the cost. There’s still $500,000 left to pay so he asked the carrier to give him additional coverage using his excess liability. However, the carrier didn’t approve his request as the excess liability only applies to the general liability policy and not to any other liability insurance he has availed.”

With that said, if you want a single insurance policy to act as a backup for all of your liability policies, consider getting umbrella insurance.

Umbrella Insurance

Unlike excess liability insurance, umbrella insurance can act as an additional option to multiple amazon seller liability insurance. In simple terms, this insurance extends the coverage of all your liability policies the moment they reach their limits. Here’s an example:

“A businessman has umbrella liability amounting to $2 million, which is added to his general liability and product liability account each amounting $1 million.This businessman is then ordered by the court to pay $2 million to a customer for a defective product and another 2 million for an employee who suffered from a work-related injury.  Since there’s umbrella coverage instead of excess coverage, the carrier has no reason to deny the businessman’s request to get more money when his general liability and product liability reach their limits.”

Amazon Product Liability Insurance

A product liability insurance for Amazon sellers will account for the cost of lawsuits and settlements arising from a customer who received a defective product from your business. If you’re an Amazon seller who is reselling products from a manufacturer,  you don’t have anything to do with quality control. And so, an Amazon product insurance policy is a must. 

Amazon’s guidelines don't require sellers to get product liability insurance. However,  you should still opt to avail of it. The first reason is that filing and getting your claim approved is fast if you turn to product liability to pay for legal costs and settlements arising from a defective product. Second, is that general liability is better used for covering expenses related to employees and your business. 

Consider getting product liability insurance if you’re selling these:

  • Coffee maker

  • Drip towers

  • Knives

  • Toys

  • Gadgets

  • Equipment and machinery

  • Food products

Amazon Seller Suspension Insurance

Amazon sanctions seller accounts to ensure that customers stay happy and get the best products.  One of the most problematic sanctions that the company may do is the suspension of your seller account.  Suspension happens when:

  • You sell any products that are in Amazon’s restricted products list. Examples are endangered animals, prescription-only products,  and coin-operated slot machines. 

  • You infringed the terms stated in the user agreement.

  • Your Amazon store  is continuously getting bad reviews and complaints from customers

It’s indefinite how long Amazon will suspend an account, as it can only be used  by the seller again if all the requirements such as an appeal for reinstatement and Plan of Action are submitted. However, even submitting these immediately doesn’t mean that an account is activated as quickly as possible because it will be subject to a review.

Let’s hope that Amazon will not suspend your account. Still, it can happen and that’s why you should opt to get Amazon suspension insurance. An amazon suspension insurance will pay for lost income, profit, and increased operations costs and employee wages (if there are any). It comprises

  • Loss of gross profit insurance - accounts for the lost profits your Amazon store would have made if it was not suspended. 

  • Loss of gross revenue insurance   - accounts for the lost sales that occurred after your account is suspended.

  • Increased cost of working insurance - covers any additional expenses needed for conducting business operations that emerged after account suspension. 

An Amazon suspension insurance will help your business stay afloat until Amazon gives you authority to sell once again. However, this insurance can’t do anything if your store is permanently banned from selling. That’s why it’s also a good idea to get business interruption insurance

Compare Amazon Seller Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

In partnership with:

Identity logo

In partnership with:

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Amazon Seller Insurance Cost

The average Amazon seller insurance cost is $41 per month or $492 per year for $1 million general liability insurance policies.  It's best to call carriers by the way as pricing heavily depends on years of doing business as an Amazon seller,  type of products sold, location, income, etc. For a more specific idea, here's a table showing you the pricing of companies offering amazon seller insurance. 

CompanyMonthly CostYearly CostFeaturesPerksBest for
NEXT Insurance$47$550Combination of general liability, commercial property, and commercial autoAM BEST rating of A-Excellent
An Amazon partner
Allows you to add additional insureds to your policy
Amazon prime sellers
Coverwallet$21$250Combination of general liability and product liability and can be added with cyber liability and insurance for acts of terrorism.AM BEST rating of A-Excellent
Allows you to add additional insureds to your policy
Online Amazon seller insurance quotes
Thimble $32$380Combination of general liability, 3rd party non-employee liability, 3rd party property damage, and personal and advertising injury. - Rated by BBB with A+

- Allows you to add additional insureds to your policy

- On-demand policies starting from $5 per hour
New Amazon sellers as well as freelancers needing on-demand policies by the hour
The Hartford$27.91$334.92General liability insurance that comes with professional liability and limited liability insuranceAM BEST rating of A+
Allows the extending of coverage

Established and thriving Amazon sellers

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