Amazon Product Legal responsibility Insurance coverage: What Sellers Must Know


Most sellers don’t notice that Amazon requires them to have product legal responsibility insurance coverage. The retail big isn’t accountable for vendor’s mishaps. It’s as much as sellers to guard themselves from accidents, accidents or litigation. Fortunately, eCommerce insurance coverage isn’t as advanced as it could appear.

That is the place Amazon’s Product Legal responsibility Insurance coverage necessities can assist. {The marketplace} gives nice insights to get correct protection to guard your property.

On this publish, we’ll dig into Amazon’s insurance coverage necessities. You’ll be taught its professionals and cons, and how one can meet the product legal responsibility necessities.

Why Do You Want Product Legal responsibility Insurance coverage?

Product legal responsibility insurance coverage protects your model from claims that an merchandise triggered injury or damage to the client.

Let’s say a product you bought triggered a bodily damage to the client. In such a case, product legal responsibility insurance coverage will handle the medical invoice to deal with the client. 

One of these insurance coverage may cowl any authorized charges from lawsuits. In different phrases, you’d be defending your model from expensive settlements.

Observe: Restricted Legal responsibility Corporations (LLC) may be an additional safeguard in opposition to potential lawsuits. It’s not an Amazon requisite, however an LLC generally is a second layer of safety to your model’s property. 

Associated content material: Should You Sell As A Sole Proprietor Or LLC On Amazon?

New Amazon Product Legal responsibility Insurance coverage Necessities

Amazon has confronted some item-related lawsuits just lately. This inspired the retail big to implement its long-held insurance coverage requisites for sellers.

The transfer additionally prompted new modifications to Amazon’s insurance policies to guard each sellers and prospects.

A to Z Assure Enlargement

A-to-Z Assure claims defend prospects from all order points made to third-party manufacturers. Amazon critiques every criticism and determines if it’s eligible for a refund.

This new growth additional protects sellers in opposition to fraudulent claims. Right here’s the way it works:

  1. When a person information a declare, Amazon will analyze the request to show its validity.
  1. Amazon mediates all legitimate claims resolutions between sellers, prospects, and the insurance coverage supplier.

The brand new growth saves manufacturers from having to test A-to-Z claims on their very own. As an alternative, Amazon takes care of the method.

Watch this video to be taught extra about A to Z claims:

Amazon Pays Up

In case of legitimate claims, Amazon will cowl any compensation beneath $1000. Plus, {the marketplace} gained’t search compensation from sellers with legitimate insurance coverage.

Greater than 80% of claims are beneath $1,000. By protecting the expense, Amazon protects each sellers and prospects who comply with its insurance policies.

Observe: Sellers are liable for claims above &1,000. It’s because such claims are sometimes lawsuits.

Insurance coverage Requisites for Sellers

For the second, solely Amazon sellers who earn over $10,000 per thirty days require legal responsibility insurance coverage. Observe that your insurance coverage should meet the next standards:

Coverage Limits

A minimum of $1 million per prevalence, generally mixture, and in mixture for merchandise and accomplished operations.

The coverage ought to cowl all liabilities associated to your corporation operation:

  • Merchandise legal responsibility
  • Bodily damage
  • Private damage
  • Property injury

Coverage Sort

Go for Business normal legal responsibility (GGL), umbrella, or extra legal responsibility.  Observe that your coverage should be written based mostly on prevalence.

Coverage Deductible and Protection

The coverage ought to cowl all merchandise listed within the market. As for the deductible, this should be beneath $10,000. Amazon doesn’t settle for greater quantities. Plus, the deductible must be listed in your certificates of insurance coverage. 

Insurance coverage Supplier

Be sure to rent a supplier with World declare dealing with capabilities. In addition to, its monetary ranking should be S&P A-, AM Finest A-, or greater.


Sellers can embrace further insureds in your coverage. Solely be sure that they match the authorized entity identify offered to Amazon.

Observe that you should add Amazon as an extra insured. This additional protects {the marketplace} by your individual coverage.

Cancellation Discover

Amazon requires sellers to inform them of any modification or non-renewal to their coverage. This should be executed with no less than 30 days’ discover.


The coverage should be signed and accomplished inside no less than 60 days from the submission date to Amazon.

Certificates of Insurance coverage

You’ll get this doc out of your insurance coverage supplier. The certificates of insurance coverage contains the individuals and property coated, the protection quantity, deductions and exclusions.

Amazon provides you 30 days to add the certificates of insurance coverage to Vendor Central.

Yow will discover Amazon’s Insurance coverage Coverage Standards in Vendor Central. Go to the “Program Coverage” assist web page and click on on “Professional Service provider Insurance coverage Necessities.”

Methods to Get Product Legal responsibility Insurance coverage

Sellers can choose any insurance coverage supplier they need. Granted, their closing alternative should adjust to Amazon’s insurance policies.

The method is sort of easy. Contact insurance coverage suppliers like Geico and Wells Fargo. State that you’re an Amazon vendor and so they’ll ship you a quote.

You can too select an organization that makes a speciality of eCommerce insurance policies. The method could also be a bit simpler since they already know the protection you want. 

Properly Insurance coverage, Bunker Insurance coverage and Subsequent insurance coverage are three nice choices.  

However what if you’re having bother choosing an insurance coverage supplier? Properly, you may get assist from the Amazon Insurance coverage Accelerator.

Amazon Insurance coverage Accelerator


Supply: Marsh

The retail big partnered with Marsh to create Amazon Insurance coverage Accelerator. It’s a community of accredited corporations that supply aggressive legal responsibility insurance coverage to sellers.

You possibly can entry the Insurance coverage Accelerator in Vendor Central.

Observe that it’s not required to make use of an insurance coverage supplier throughout the program.  Nonetheless, be sure that your chosen agency meets Amazon’s coverage necessities.

Observe: International-based sellers want a worldwide safety coverage. They have to additionally buy insurance coverage inside their nation of origin.

Ultimate Ideas

Observe that almost all sellers should adjust to the Amazon Product Legal responsibility Insurance coverage necessities by September 1, 2021.

Additionally, it’s not clear whether or not sellers who earn beneath $10,000 per thirty days require insurance coverage. Nonetheless, it’s higher to be secure than sorry. 

The chances of getting an Amazon buyer sue you’re low. But it surely’s all the time higher to be ready. So, stick with the Amazon Product Legal responsibility Insurance coverage necessities as a lot as attainable.

As you see, it’s not that difficult to insure your Amazon enterprise. Plus, it’ll provide you with a lot wanted peace of thoughts, so you possibly can deal with enhancing your service.

It’s all the time higher to have your insurance coverage arrange than having no safety in any respect.


Esteban Muñoz is an website positioning copywriter at AMZ Advisers, with a number of years’ expertise in digital advertising and e-commerce. Esteban and the AMZ Advisers workforce have been in a position to obtain unbelievable development on the Amazon platform for his or her shoppers by optimizing and managing their accounts and creating in-depth content material advertising methods.