Best Small Business Insurance
Best Small Business Insurance
Opening your products to Amazon’s customer base of 300 million people is so exciting that it’s easy to forget about mundane business matters like liability coverage.1 But even if your Amazon ecommerce business is just a side hustle for now, you’ve got to get your business ducks in a row. Fail to do so, and you can face serious consequences, including permanent suspension of your Amazon seller account.
Amazon seller insurance is one of those often overlooked business matters. Having a solid insurance policy is essential for futureproofing your Amazon ecommerce business so you can sell for a long time to come — without a lawsuit ruining everything you’ve worked so hard to build.
From exploding vape pens to fire-starting hair dryers, lawsuits are brought against Amazon and third-party sellers all the time.2 If this happens to you, you want to be protected against the financial consequences.
Read on to learn what insurance Amazon requires, what it covers, and how you can get insured quickly.
Amazon states that if you’re a Pro Merchant (someone with a paid “Professional Selling” account), you must carry commercial general liability insurance that:
Amazon also requires Pro Merchants to provide proof of their insurance with a Certificate of Insurance. This is a one-page document that highlights all the important details of the Pro Merchant’s policy, such as its name, the type of coverage, and insurance limits. It’s also where it’ll list Amazon.com and its affiliates and assignees as Additional Insureds.
Amazon states that individual seller accounts are not required to have insurance. However, insurance is still highly recommended.
General liability insurance provides protection from third-party liability in a number of scenarios that can hurt your business. Here’s a quick overview:
Non-employee, bodily injury: When you sell on Amazon, you’re probably not the only one touching your products. You may have vendors who help with manufacturing, shipping, and packaging your orders. If they get injured while visiting your place of business (even if it’s just your garage), they can bring a claim against you. If you also operate a brick-and-mortar, the same goes for your in-store customers. If they get hurt, they may sue you.
Property damage: General liability also offers coverage for third-party property damage. If you break something and you don’t own it, you could be liable — whether that property is owned by a vendor, customer, or a complete stranger.
Personal and advertising injury: Selling on Amazon is competitive. A competitor could claim you stole their product idea. You could accidentally use copyrighted material in your product listing. Fortunately, commercial general liability insurance offers coverage for third-party claims of libel, slander, and intellectual property infringement.
Commercial general liability policies also include product liability, sometimes referred to as “products and completed operations.” Product liability coverage covers scenarios where a third party claims that your product injured them, damaged their property, made them sick, or caused their death.
It’s important to note that general liability insurance provides coverage for the investigation, defense, and settlement of these types of claims — whether or not you are ultimately found at fault.
Technically, no. Amazon only requires Pro Merchants to carry general liability insurance if their sales exceed a certain threshold for three months in a row. At the time of writing, that amount is $10,000 per month.
However, that sales threshold could change at any time. So, even if it does not reflect your current sales, or if you’re not currently a Pro Merchant, it’s a good idea to protect your Amazon business with general liability insurance.
Sales fluctuate from month to month, and your business plans can change. When your sales skyrocket, or you take the leap to be a Pro Merchant, you’ll be focused on celebrating — not whether or not you’ve hit Amazon’s insurance threshold. You don’t want to find yourself in hot water with Amazon simply because you forgot to purchase insurance. Protect yourself with general liability insurance now, and you can stay focused on your business.
General liability insurance is a must-have for anyone who sells on Amazon. However, you may want to consider a few other insurance policies, depending on what your business needs. For example, property insurance protects the value of your equipment, supplies, and your office (even if it’s a home office). If you use a vehicle to transport your products, you may need commercial auto insurance to provide coverage for damage, accidents, or litigation. Finally, if you have employees, you’ll want to purchase workers’ compensation coverage. Almost all states require a business with 1 employee or more to carry workers’ comp insurance.
Selling on Amazon has a lot to offer. Third-party sellers enjoy the platform’s global reach and the boost in sales that comes with it. But to paraphrase Spiderman’s Uncle Ben, “With great profits, comes great responsibility.” It’s up to you to be responsible. Being an Amazon merchant comes with lots of potential liability, and you’ll need Amazon seller insurance to stay protected.
Cleaners and Janitors insurance protects your business from lawsuits, if you or your property accidentally hurts a third party or damages their property.