Amazon has become the top e-commerce platform with 300+ million people worldwide that 57% of people now use Amazon as the most trusted platform for online shopping, which makes it the world’s largest trading platform. With this increasing traffic, the chance of getting claims is also higher If you are selling on Amazon, you have to treat it like other businesses protect it with proper insurance from liability claims.

What is Product Liability insurance?

Liability insurance, also called third-party insurance, is a set of systems that protects against claims resulting from injuries and damage to people or property. Liability insurance covers any legal costs and payouts for which the insured party would be found liable, but it will only pay to the third party or insured party, not the policyholders.

Why do you need Product Liability insurance to sell on amazon?

In any business, there is always a risk that your business may face unexpected problems. When most of the sellers started their amazon business, they didn’t know how to protect their business from unforeseen circumstances; therefore, many people claim amazon for sending faulty products. Without proper insurance, the claims would be costly.

The Product Liability insurance protects you and your business from these obligations because there is a possibility that you could have a defective or damaged product. The insurance will cover any financial loss if the insured party is found legally liable.

For example: if the buyer buys the set of solar eclipse glasses and claims that the glasses did not protect their eyes from the solar eclipse and thus ruined their vision.

As a seller of the product, you would think how possible the glasses could harm the people, so with amazon liability insurance, you could protect your business from these risks of liability and ligation.

LLC for more Protection:

A limited liability company (LCC) is a business structure that protects its owners or investors from personal liability claims. Anyone can be a member, including individuals, corporations, foreigners, and even other LLCs.

So, if your business is set up as a partnership and not an LLC, then if someone sues your company, they can sue your assets as well. Make sure to set up your amazon business as LLC for additional protection.

Will Amazon cover any claims?

Yes, the amazon new insurance policy that will cover claims under $1000 till now amazon has resolved 80% of the claims under $1000.
In case of any legal liability, amazon will check and resolve the issue without affecting your order defect rate and will keep you informed at every step.

Is amazon offers insurance to all of its retailers?

No, Amazon does not provide insurance to all of its retailers because they are some bogus sellers in the market. Amazon has some criteria for sellers to obtain product liability insurance once they fulfill all the requirements.

Under section 9 of the Amazon Service Business Solution Agreement, the seller should have a gross sale of $10,000 within 30 days or more to carry insurance. The insurance will cover all your products you list for sale on Amazon for $1,000 or less with no penalty to sellers. 

Where to get Liability insurance, and how does it cost?

Getting liability insurance is as simple as you contacting a local insurance company. Today there are hundreds of websites and insurance companies are available. You can easily give them a call or visit their websites and ask them about commercial general liability insurance/ general liability insurance or product liability insurance.

Amazon Insurance Accelerator:

Amazon has launched an amazon insurance accelerator for sellers to easily find the most suitable and affordable liability insurance for their businesses.

Many corporations and startup company’s partnerships with accelerators to get easy access by such a huge population. It can give you quotes from multiple insurance companies, so it can be used to find the best prices with maximum coverage. You need to provide vital information about your business.

Insurance companies specifically for Amazon sellers:

Some best insurance companies that work specifically with amazon that gives you the maximum insurance coverage are

  • Well Insurance.
  • Next insurance.
  • Bunker Insurance.
  • Marsh.
  • Insureon Insurance.

You need to fill the application form that requires your details such as your business name, its operations, plus history, annual revenue, business partners, history of insurance, and any prior claims. You will be asked if you or any business partners have been convicted of a felony.

Certificate of Insurance (COI):

The certificate of insurance or COI is issued by an insurance company that verifies the person’s insurance. Certificates of insurance contain separate sections for different types of liability coverage. After getting insurance you need to upload an insurance certificate on seller central


As you can see, getting insurance for your Amazon business isn’t as difficult as you might think plus, it will protect you and your business from obligations. In other words, have peace of mind so you can focus on growing your business! “It is better to have it and not need it than to need it and not have it.” If you have any other questions regarding Amazon product liability insurance, please leave a comment below!

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