Amazon Sellers Insurance Requirements – Does your insurance meet the Requirements?
Amazon Sellers Insurance Requirements are new for 2021 and our clients indicate that failure to comply will result in withheld payments. The new requirement have some very strict and previously unseen stipulations from Amazon.
First, they are requiring an Occurrence Form¹ policy. This is a policy form not previously stated in the prior requirements.
Second, they are requiring a global claim handling capability.
Third, they have specifically required that the insurance coverage must cover sales from all products you have listed for sale on the Amazon website.
Forth, the policy must match your legal name as you have provided to Amazon. This means that if you were previously listed as an additional insured on a manufacture’s or supplier’s policy and used that as proof of insurance, you may no longer do so.
Click here for more information on Product Liability Insurance For Amazon Sellers.
Click here for a quote for Product Liability Insurance Quote For Amazon Sellers.
What are the Amazon Sellers Insurance Requirements?
At the time of writing, the following are insurance requirements to be an Amazon Seller:
- The policy limit must be at least $1 million per occurrence and in aggregate. And it is to cover liabilities caused by or occurring in conjunction with your business operations, including products, products/completed operations and bodily injury.
- The insurance policy type can be either commercial general, umbrella, or excess liability and be occurrence based¹.
- Your insurance provider must have global claim handling capability and a financial rating of S&P A- and/or AM Best A- or better. (If S&P or AM best is not valid or used in the country where you are required to obtain insurance, a local equivalent is allowed)
- Your insurance provider must give Amazon at least 30 days’ notice of cancellation, modification or nonrenewal.
- The policy must name “Amazon.com Services LLC., and its affiliates and assignees” as additional insureds.
- The policy must cover all sales from products you have listed on the Amazon website.
- The deductible for any policy(ies) must not be greater than $10,000 and any deductible amount must be listed on the certificate(s) of insurance.
- Your insured name must match the “legal entity” name you provided to Amazon (view your legal entity name).
- The policy must be completed in its entirety and signed and;
- The policy must be valid for at least 60 days from the date of submission.
Insurance Requirements Update March 2022¹:
Amazon has updated it’s requirements to allow for Claims Made policies for certain classes of products, vs. Occurrence Form policies. These classes include, but are not limited to: Supplements, some medical products, protective sporting goods and fitness products, and infant products.
We can assist with Amazon Sellers Insurance Requirements.
If you need the coverage require to maintain compliance with the Amazon’s Sellers Insurance Requirements click here to request a Product liability Insurance Quote.
What is the typical cost of Product Liability Insurance, you ask?
Common question, however it is not that simple. Product liability insurance costs are much like any other liability insurance product. Product Liability Insurance can vary from $.05 per $1,000 in sales to over $50.00 per $1,000 in sales. There no true validtypical rate because they are based on the specific type of product you manufacture, retail, import, or market. So, what one company is paying for product liability insurance means nothing to another. If they are selling different amounts of different products with different uses.
There are some products that pose very little potential to cause harm or damage. There are others that have a higher propensity to be risky, and therefore carry higher premiums. Like may other products and services, typically as sales increase in a certain product classification, the cost per $1,000 in sales tends to go down.
