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Amazon business insurance is an essential part of a successful home-based business. It offers protection for online sellers from risks that can wipe out their business. These risks include product liability claims, customer lawsuits, shipping issues, and cyber threats. Ecommerce insurance is built for the unique challenges of selling through the world’s largest ecommerce platform. And keep in mind: if you use Fulfillment by Amazon (FBA), sell physical products, or hit certain sales thresholds, insurance is not just a good idea. It is required.
The right insurance policy helps you stay ahead of problems before they turn into financial disasters.
Key Takeaways:
If you are selling on Amazon, even at a smaller scale, business insurance for amazon sellers is essential. It is not just a box to check. It is what stands between you and a devastating legal or financial hit.
Technically, to sell on Amazon you need you’ll need insurance if you:
One Reddit user described selling overseas-manufactured phone chargers. One charger caught fire and damaged a customer’s property. Amazon offered no support. The seller said, “I was on my own, and the legal bill was worse than the damage.”
Even if you are under the revenue threshold, a single lawsuit can cost more than your entire year’s profit.
Amazon seller insurance usually starts with a Commercial General Liability (CGL) insurance policy. From there, you can build a stronger policy based on your business needs.
Here are the most common coverage types:
Claims don’t care whether you run your business from a kitchen table or a leased facility. If something goes wrong, Amazon expects you to deal with the fallout.
A supplement seller based in Texas was sued after a customer claimed a severe allergic reaction. The customer demanded compensation for medical costs and emotional distress. Fortunately, the seller had product liability coverage. The insurer paid for legal defense and a $70,000 settlement. Without that coverage, the seller likely would have gone out of business.
In 2021, a customer was injured by a defective dog leash sold by a third-party Amazon seller. Amazon reimbursed the buyer, but legal responsibility still rested with the seller. Only proper Amazon seller liability insurance would have protected the business.
Amazon business insurance goes beyond general liability. It is designed to cover the specific risks ecommerce sellers face when shipping physical products to customers.
Typical coverage includes:
There is no such thing as an insurance policy to cover every type of loss. Here are some exclusions to watch for:
Many of these gaps can be filled with optional add-ons. A broker who understands Amazon’s policies can help you build a plan that fits your business.
Costs vary depending on your business model, product category, and revenue. Amazon seller insurance cost is between $300 and $900 annually for coverage that meets Amazon’s seller insurance requirements.
What affects the price?
If you sell low-risk products and have no claims, your premium may be on the lower end. Always compare quotes and coverage levels before purchasing.
Across Reddit threads and seller forums, the message is clear. Amazon business insurance is essential.
Some sellers shared how Amazon suspended their accounts for not having proof of insurance. Others said they were glad they had a policy after facing product defects or legal threats.
One seller ignored insurance until a product recall cost them thousands. Another said, “I got covered before anything happened, and I sleep better because of it.”
The community consensus is simple. Protect your store before your luck runs out.
Here’s how to secure the best Amazon seller insurance coverage:
Not officially, but even one shipment can create a legal issue. Early coverage is smart.
Amazon’s A-to-Z Guarantee protects buyers, not sellers.
$1 million in liability coverage per occurrence and total. Amazon must be listed as an additional insured.
Yes. A Business Owner’s Policy (BOP) can combine liability and property coverage to save money.
Amazon can suspend or deactivate your seller account.
Most likely not. Homeowners policies typically exclude business-related property and claims.
Running an Amazon store can be rewarding, but it is also risky. One defective product or one lawsuit can shut your store down.
Amazon business insurance protects what you are building. Whether you sell part-time or operate a large FBA business, the right policy helps you focus on growth instead of legal threats.
Compare quotes today and get covered before your next shipment goes out.
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