Amazon Seller Insurance Basics

Getting insurance for your Amazon business is not exactly one of the first things that come to mind when you think of selling on Amazon. Your Amazon business is a business in the truest sense of the word, and the ugly truth is that businesses get sued. If one of your customers was to have an accident while using your product, you could get sued for damages. You might be thinking that it’s impossible for anyone using your product to get injured and that it’s not something you really need to look into but keep in mind that people that might sue you are not necessarily going to be reasonable.

For example, a customer slipped on a package delivered by UPS in front of their door, and that customer proceeded to sue UPS, Amazon, the seller, and the manufacturer. Even though the idea that the seller of the product in this instance would in any way, shape, or form be liable, is absurd,  the seller would still need to hire an attorney to go to court and get this case thrown out.

After you’ve gone through all the trouble to take all the steps to learn how to start selling on Amazon, grow your business, and get the reviews and the rankings, you don’t want to have it all crumble to the ground because of some unforeseen accident.

Amazon actually requires their sellers to have insurance. However, not all types of accounts have this requirement.. If you are an individual seller, you’re not required to be insured. However, if you have a professional sellers’ account, you are required to have insurance after you reach a certain threshold of monthly sales, which is:

  • $10,000 USD if you are selling in the USA
  • 10 000 CAD if you are selling in Canada
  • 1,000,000 JPY if you are selling in Japan
  • 100 000 MXN if you are selling in Mexico

This means that if you have a monthly revenue higher than the applicable amount for three months in a row, you are required by Amazon to be insured for any financial obligations that result from accidents, injuries, or litigation.

How to get Amazon sellers’ insurance:

The process is actually not that complicated. You can simply reach out to an insurance company and ask them about their general liability insurance, or product liability insurance. You can also find some independent insurance companies that might quote estimates from a number of different insurance companies, in order for you to compare and pick the best one for you.

How much your insurance is going to cost will depend on several factors:

  • The type of product that you’re selling
  • The number of units you’re selling
  • Your revenue
  • Your business structure

In order to get a proper quote from an insurance agency, you will need to provide them with a lot of details about your business. They will want to know about the type of business your company is registered as, its operations, and your ownership structure. They would want to know if there were any previous insurance claims in the past. If you are running your business with partners, you would be asked if they have a record.

Once your insurance agent has all the information, they will give you a quote for what your yearly premium should be. For smaller sellers that have gone over those thresholds, you can expect it to be around $500 a year, which is not a bad deal considering the protection you get.

The insurance should provide coverage for up to  $1,000,000 in product liability, bodily injury, personal injury, or property damage claims. If you have reason to believe that your claims might be higher, you should ask for an insurance policy that covers that.

When you are looking into insurance companies, you should try and look for the one that offers you the best deal for your personal protection, rather than one that is simply fulfilling Amazon requirements. You can also look into having insurance in the event that your account gets suspended.

In conclusion, Amazon does require you to get insurance after you reach a certain point in sales revenue. This doesn’t mean that you should wait for it to get there in order to insure yourself. In fact, if you get ahead of this and start looking into the right insurance policies for yourself before you are required to, you can take your time and really educate yourself. This will allow you to truly find the insurance provider that is the best fit for your needs, rather than being pressured by Amazon to do it as fast as possible once you reach the threshold. Insurance is one of those things that you would rather have and not need, than not have it and need it.


Guest post courtesy of Yana Yakovenko

Mercy - CBNation

This is a post from a CBNation writer. CBNation is a Business to Business (B2B) Brand focusing on increasing the visibility of and providing resources for CEOs, entrepreneurs and business owners. CBNation consists of blogs(, podcasts ( and videos ( CBNation is proudly powered by Blue 16 Media.

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