Whether today is your first day on Amazon as a seller or you’ve been a pro growing your business for years, it’s essential to protect yourself with Amazon seller insurance. It may be a requirement in some situations, even if you’re a small brand. Amazon requires some sellers to carry active insurance coverage. You might be asked to share a certificate that shows you have the appropriate coverage when selling your products online.
Here are the details on Amazon insurance for small brands you need to know.
When Do I Need Insurance to Be an Amazon Seller?
Amazon sellers with Pro Merchant accounts that achieve gross sales of $10,000 or more per month for three consecutive months must have business insurance. This requirement limits the marketplace’s liability exposure should your company sell something that causes damages or injuries.
Liability insurance is good to have whenever you have your own business. If someone hurts themselves or experiences financial loss when using your item, they could come after your company and sue you for damages.
Some jurisdictions require companies to obtain liability insurance before issuing a business license. Several states require you to have a license to be an Amazon seller, so you’ll need to review local requirements. If your business is structured as a sole proprietorship, any litigation that occurs will put your financial assets at risk. That can include your home, car or investing assets. Insurance can protect you to a certain extent, but it is a good idea for those with Pro Merchant accounts who qualify for insurance to structure themselves as an LLC.
What Are the Amazon Insurance Requirements for Small Businesses?
If Amazon requires you to carry insurance because of your seller account status, you’ll need at least $1 million in liability coverage. The insurance policy must cover bodily and personal injury, product liability, broad form property and contractual damage, and products-complete operations.
You’ll need to ask your provider to ensure product liability is included in the policy. It isn’t always in the standard insurance sold by brokers or agents.
You Must Add Amazon as an Additional Insured
When purchasing coverage for your business as a seller, Amazon requires that you list it and its assignees as additional insured on the policy. This step assures Amazon that it has protection from your provider if someone decides to sue them because of something that happened because of one of your products. Your policy helps to defend them in lawsuits or settlements awarded up to the aggregate limit offered by the coverage.
How to Provide Proof of Insurance to Amazon
Amazon has the right to request a certificate of insurance to prove you’ve obtained the required coverage as a seller.
If you receive this request, you must respond to it with the appropriate documents. Most insurance companies allow you to download your insurance certificate without restriction if you have online access to your account.
A physical certificate would be sent to the following address.
ATTN: Risk Management Team
PO Box 81226
Seattle, WA 98108-1226
Please refer to the official request received for any specific instructions Amazon wants you to follow as a seller to meet this stipulation. Having an optimized listing which clearly defines your product and its features avoids confusion and legal claims. Reach out to PR Brand Marketing for a professional Amazon Listing today!