Amazon Seller Business Insurance

Amazon Pro Merchants and sellers who have earned $10,000 in any given month must carry the following types of liability coverage. Regardless of requirements, these insurance policies are strongly recommended for any business that sells products to customers.

• General liability insurance: This gives you peace of mind and financial protection against accidental harm to customers or their property. It also covers advertising injuries, such as copyright infringement or defamation.
• Product liability insurance: Often included in general liability insurance, this policy defends your business against lawsuits related to products. For example, it will cover your legal costs if a product injures a customer or damages their property.

Your liability policy must have, at a minimum, a $1 million per-occurrence limit and a $1 million aggregate limit. You can also purchase commercial umbrella insurance or excess liability insurance to comply with these requirements, so long as it includes the above types of coverage.

Amazon sellers need to name Amazon and its assignees as additional insureds on their policies, which means they are protected by your coverage. You must also upload a copy of the certificate of insurance to the platform within 30 days of their insurance request.

Yes, but it is extremely limited. Amazon's A-to-Z Guarantee covers claims of up to $1,000 in the event of a defective product that causes property damage or a personal injury. That means customers can get refunded that amount directly from Amazon.

This sounds good, but it's important to keep a couple things in mind:

• Lawsuits typically cost far more than $1,000. If a customer is injured by a product, their medical expenses can skyrocket far above this amount. And if they sue your business, you could be looking at a claim for hundreds of thousands of dollars.
• It only covers defective products. Defective products are just one kind of lawsuit that could affect your business. You still need insurance for other types of claims, such as a competitor who sues you for copyright infringement.

Overall, Amazon's guarantee is no replacement for a general liability insurance policy. One thousand dollars is a drop in the bucket during a lawsuit, which means you're essentially unprotected against the most serious threats to your business.

Yes, you can buy commercial insurance to protect your Amazon storefront against theft and burglaries, along with damage caused by fires and storms. It's important to secure this coverage, as your homeowner's insurance provides little to no coverage for business property.

There are two kinds of business insurance that protect against theft:

• Commercial property insurance: This coverage protects your inventory and other business property against losses from a wide range of causes. That includes theft, fires, storms, burglaries, and vandalism. You can bundle it with general liability insurance in a business owner's policy to save money.
• Fidelity bonds: A fidelity bond provides reimbursement in the event of employee theft. For example, an employee might forge a customer's signature or conduct an illegal electronic funds transfer.

When you buy a policy, check with your insurance company to see if they offer any discounts. You might be able to save money on insurance by installing an approved security system or taking other steps recommended by your provider.

In addition to those mentioned above, the following insurance products help Amazon sellers avoid different types of losses:

• Business interruption insurance: Also called business income insurance, this policy covers costs related to a temporary closure from a fire, storm, or other covered property claim. It's often included in a business owner's policy.
• Equipment breakdown coverage: This helps pay for financial losses related to the sudden breakdown of specialized machinery or equipment, such as a 3D printer. However, it does not cover general wear and tear.
• Electronic data processing (EDP) insurance: This policy helps you recover financially from corrupt or lost data resulting from a power outage or similar event that affects your computer systems.
• Inland marine insurance: If you store your inventory at a storage unit, then you need this coverage to protect it. Commercial property insurance only covers your business's building and its contents, not items stored off site.