Product Liability Insurance for Amazon Sellers

Product Liability Insurance for Amazon Sellers for the Products you manufacture, market, import, or distribute. Designing, manufacturing or distributing a product is an exciting venture and being an Amazon Sell opens up a whole new world of opportunity with almost unlimited sales potential. However, in order to be an Amazon Seller, Amazon requires you to maintain product liability insurance.

These are typically general liability policies that include products and completed operations. Additionally, whether you manufacture them, import them, or even resell them you may be held responsible. Chances are you will be sued if there is an injury that results out of use of a product you sell.

Why do you need Product Liability Insurance for Amazon Sellers?

Product Liability Insurance Coverage covers the policyholder in the event that a suit arises out of the use of the insured’s products. This can be loss to personal property, business property, bodily injury or death. These items may be clothes, toys, tools, building materials, electronic devices or even pet food or supplies.

Why does Amazon Require Sellers to Maintain Product Liability Insurance?

Amazon’s concerns may not be much different from the ones you should have with respect to Product Liability Insurance. In the event that there is injury or damage they, and yourself, should be concerned about legal fees. The costs to defend a lawsuit, as well as judgements or settlements would be your responsibility. These would need to be paid if there is bodily injury or property damage as a result of the use of your products.

What does Product Liability Insurance Protect You From?

Liability insurance is designed to protect the business against losses even if they are negligent or liable. This applies to damage, injury, or loss to another’s property. Typically, damages, legal defense fees and settlement charges are paid by the insuring company. Your insurance company should respond when a claim is filed against your business as a result of a Products Liability Suit.

Product liability insurance will cover the insured for suits that arise out of damage or injury of use of a product that the holder of the insurance policy manufactures or sells. One key factor is that having a product liability insurance policy in place is that it will provide legal defense for your company. This would apply if you are sued as a result of injury or damage that arises out of use of your product.

What Product Liability Coverages are Required for Amazon Sellers?

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 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.
• 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.
• 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)
• Policy must be completed in its entirety and signed.
• The policy must be valid for at least 60 days from the date of submission.
• Certificate holder & Additional insured must read: Amazon.com Services LLC and its affiliates and assignees, P.O. Box 81226, Seattle, WA 98108-1226

Bodily Injury that may Arise Out of Use of Your Product

Product Liability Insurance may pay the affected person or firm for the cost of care, the loss of services and restitution for death that results from an injury.

Property Damage Liability

In the event your business or product causes damage to, or causes the loss of use of someone’s property. Property damage liability coverage may pay for the value of the physical damage to the property. Or the loss of use of that property.

Why is it required to have Product Liability Insurance for Amazon Sellers?

In 2020 Amazon was sued for a product liability insurance claim.² Subsequently, it appears that their requirements have been more strictly enforced. Anyone that is responsible for the design, manufacture, import, sale or distribution of a component or end user product. This applies to any business or individual that manufactures his own product or even if you subcontract the manufacturing to another operation. Even if the operation is overseas. A small sampling of the classes we provide coverage for are Food Product Liability Insurance. Cosmetic and Skincare Product Liability Insurance. Dietary Supplement Product Liability Insurance. Fitness Product Liability Insurance. Electronic Cigarette Product Liability Insurance. Beer, Wine & Spirit Product Liability Insurance. Furthermore, we can provide coverage for apparel, footwear, medical devices, hand & power tools, jewelry,

How much does Product Liability Insurance for Amazon Sellers Cost?

A Products Liability Insurance Policy is rated on several factors:

• What are the products you are insuring coverage for?
• How many of these products will be distributed into the market?
• What are they used for and who will be using them?
• How long are they intended to last?
• Are the products safe, and have they been properly tested?
• What are they made of or what ingredients are in them?
• Who is ultimately liable if someone is injured from using the products?
• How clearly defined are the usage instructions, directions, and warnings?
• What claims does the manufacturer or distributor make about the product, either in writing, demonstration or in media?

So, what is the Average Cost of Product Liability Insurance for Amazon Sellers?

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 valid average 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 the cost will differ. There are some products that pose very little potential to cause harm or damage. Clearly, 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 the cost per $1,000 in sales tends to diminish. There is an economy of scale just like in other industries.

What Types of Product Need Product Liability Insurance for Amazon Sellers?

Essentially any product that is put into market or sold in any venue should have products liability insurance. In Amazon’s case, every Amazon Seller is now required to maintain Product Liability insurance with very specific parameters. They include an additional insured endorsement. Some examples are food, clothing, tools, energy products, furniture, stationary goods, beverages, baked products, luggage, pet items, heating & cooling apparatus, electronic goods, vehicles, toys (especially).

In Addition to Product Liability Insurance for Amazon Sellers, what other Coverages are available?

Coverage options are almost unlimited, however some additional considerations are Product Recall, Property Insurance, Cargo Insurance, Warehouse Insurance, Workers Compensation, Employment Practices, and Intellectual Property Insurance.

Every product is different, underwriting a Product Liability Insurance policy for an Amazon Seller is complicated.

Click Here for a Product Liability Insurance Quote Request.

As many people have already found out, Castle Rock Insurance Agency offers the best quotes and coverage options for their Product Liability Insurance. We can be your low cost solution for Amazon Sellers Product Liability Insurance Policy. Castle Rock Capacity Agency currently offers Product Liability Insurance Policy Coverage in California, CA, Connecticut, CT, Florida, FL, Illinois, IL, Maryland, MD, New York, NY, New Jersey, NJ, Pennsylvania, PA, Texas, TX, West Virginia, WV, Virginia, VA, as well as almost every other state in the USA.

Product Liability Insurance for Amazon Sellers

¹ Please note, there are currently certain product classes that will not qualify for an occurrence form policy.
² https://www.law.com/thelegalintelligencer/2020/09/23/products-liability-lawsuit-against-amazon-has-settled-mooting-pa-supreme-court-argument/