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I Just Found Out I Need Insurance to Sell on Amazon? Now What?
I Just Found Out I Need Insurance to Sell on Amazon? Now What?
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I Need Insurance to Sell on Amazon?! Now What?

Protect your ASSETS because you should AND because Amazon Requires it.  

Most new sellers start out thinking they can just sign up for an account and start making millions like all the TikTok and YouTubers say. But what you forget is that there are expenses that go along with running your own business.  

And yes, an Amazon 3rd party seller is your business!  

A huge mistake you can make is when you signed Amazon’s Terms of Service (TOS) agreement, which states you must have insurance and that you will provide it at any time to Amazon. So, what happens when you don’t have insurance and can’t provide proof? 

What is required by Amazon?  

If you have a Professional Selling Plan, Amazon requires you to have General Liability Insurance. The requirement states: 

“Sellers with professional selling plans on Amazon.com must provide proof of Commercial General Liability insurance. This insurance, obtained at the seller’s expense, shall cover up to $1,000,000 per occurrence and in the aggregate and must include products liability, bodily injury, or personal injury, property damage, and other requirements as stated in the Participation Agreement. The insurance must indicate that “Amazon.com, Inc., and its affiliates and assignees” are added as additional insureds.” 

What are the insurance requirements?  

Your commercial liability insurance policy must meet all of the following criteria: 

  • Policy limits must be at least $1 million per occurrence and in the aggregate, covering liabilities caused by or occurring in conjunction with the operation of your business, including products, products/completed operations, and bodily injury; 
  • The policy must cover your sales through the Amazon.com website;  
  • The policy must name Amazon and its assignees as additional insureds; 
  • The policyholder’s name must match the name of the “legal entity” provided to Amazon. You can verify your legal entity name in Seller Central at https://sellercentral.amazon.com/sw/AccountInfo/LegalEntity/step/LegalEntity; and 
  • The policy must be valid for at least 180 days from the date of submission. 

But what does all that mean? 

Blah Blah Blah, buy an insurance policy. They want you to have a general liability policy that covers up to $1MM in damages if one of your products harms someone.  

All jargon aside, we know you take pride in your products and strive to sell only the best to your customers. But in the event that one of your products malfunctions causes a reaction or causes any other harm, you’ll want to protect your business against a lawsuit. 

This is where liability insurance comes in. 

Why is Amazon doing this? 

Time after time, Amazon keeps getting sued for faulty goods and is being held liable for 3rd party sellers’ products. If they require you to have an insurance policy and list them as additional insured, your insurance will help pay for the lawsuit, not just Amazon.  

Amazon has lost several recent legal decisions that hold it liable for defective products. 

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