Do you need insurance to sell on Amazon? The answer is “it depends.” If your Amazon business is big enough, then you’re required to get insurance coverage. So if your store is nearing the insurance requirement threshold or is already there, it’s a great idea to brush up on Amazon’s insurance requirements.
Keep reading for an A-Z guide to Amazon’s insurance requirements, what kind of policy you need, and how to get coverage.
Does Every Amazon Seller Need Insurance?
Strictly speaking, not every Amazon seller needs insurance. However, according to Amazon’s terms of service, liability insurance is mandatory if your monthly revenue exceeds $10,000.
Once you hit that revenue marker, you have 30 days to show your certificate of insurance to the platform. Otherwise, you might face an account suspension.
Why Do You Need Amazon Seller Insurance?
Amazon seller insurance is required because the platform isn’t held responsible if accidents or injuries happen because of your business activities. With liability insurance, you and your store’s assets are covered in case your store gets sued or somebody gets injured in incidents related to your store’s activity. Plus, liability insurance is mandatory according to Amazon’s terms of service, so not getting insurance may result in an account suspension.
Required Insurance Coverage for Amazon Sellers
The primary required coverage for Amazon sellers is Commercial General Liability (CGL) insurance. CGL insurance covers any medical costs and legal fees that stem from injury and incident claims caused by your business activities.
How Much Does Mandatory Amazon Seller Insurance Cost?
According to Amazon’s seller liability insurance criteria, you need coverage worth at least $1 million to be considered properly insured as a seller. For this amount of coverage, you generally need to pay around $300 to $1,000 annually.
That said, your seller insurance costs will depend on things such as the following:
- Revenue: Higher revenue usually equals higher premiums because more sales means more units in circulation, which means more opportunities for something to go wrong.
- Product categories (risk level): The higher the chance a product could cause injury or property damage, the more coverage costs.
- Claims history: If you’ve filed claims in the past (especially product liability claims), insurers may increase your premium or your deductible, or exclude specific products or activities.
- Countries where you sell: Selling internationally affects cost because every region has different liability standards. If you sell globally, make sure your policy explicitly covers each region.
- FBA vs. FBM: Insurers tend to see FBA as slightly lower risk because Amazon handles fulfillment, storage, and shipping, reducing logistics-related claims.
- Number of employees: More employees mean more operational activity and more potential risk.
- Even if you only have part-time help or a small team, insurers factor this in.
- Whether you private label or resell brands: Private-label sellers carry more responsibility, so insurers typically charge more.
Additional Amazon Seller Insurance Requirements
In addition to the $1 million coverage requirement, Amazon’s insurance policy criteria also require the following:
- The insurance policy must be written on an “occurrence basis”, which means the policy covers claims based on when the incident occurred and not when the claim is filed.
- The deductible must be $10,000 or under.
- The policy must cover all sales made on your Amazon store.
- The policy must name Amazon as its additional insured party.
- The policy must stay valid for claims about incidents that happened while the policy was active, even if those claims are made after the policy ends.
- Your insured name must match the legal entity name you provided to Amazon.
- The insurer must have global claim handling capability and an A- or better rating on S&P, AM Best, or its local equivalents.
- The policy must be completed and signed by an authorized insurer representative.
- The insurer must give Amazon at least 30 days’ notice of cancellation, modification, or non-renewal.
Optional Coverage for Amazon Sellers
CGL coverage is the primary requirement for Amazon sellers. However, you can purchase other types of insurance coverage to strengthen your protection. Let’s take a look at some extra coverage options you can get:
Product Liability Insurance
This insurance specifically covers harm caused by your products, whether the harm results from a defect, malfunction, misleading instruction, or something out of your control like a supplier oversight. This type of coverage becomes more important as your business grows or if you sell higher-risk items such as electronics, supplements, and baby products.
It’s also important to remember that product liability insurance isn’t included in Amazon’s insurance requirements. This type of insurance acts more as an add-on or supplementary coverage to your main CGL policy. However, some insurers may offer Amazon product liability insurance bundled with CGL protection.
Workers’ Compensation Insurance
Workers’ compensation insurance pays out benefits to workers who become injured or ill due to job-related accidents. Amazon doesn’t require you to have workers’ comp insurance, but if you operate in the United States, you may need this type of coverage because the government mandates it.
While workers’ comp is usually meant for employees of your business, you can still benefit from it if you’re a sole proprietor, since it can cover workplace injuries that you may suffer.
Cyber Insurance
Amazon is a digital-first marketplace. If you sell on Amazon, you may have other digital assets to protect from cyberattacks. That’s where cyber insurance comes in; it can cover you in the event of information theft and data breaches, helping you safeguard vital digital assets.
How to Get Insurance for Amazon Sellers
You can get insurance for Amazon by going to an insurance broker for assistance or talking to an insurance company representative. But before you do so, you should have the following in hand:
- Your personal contact information.
- Your business contact information, such as its entity name, FEIN number, and address.
- Details about your Amazon store and its activities.
- The number of employees at your business, if applicable.
Many companies sell CGL insurance that can fit Amazon’s requirements. Here are some example companies that you can look into for your Amazon seller insurance needs:
- AXA
- USAA
- Geico
- Travelers Insurance
- TD Insurance
- Progressive
- Chubb Insurance
This is not an exhaustive list, so if you’re trying to compare insurance companies to find the best deal, ask your local insurance broker for assistance.
Amazon Insurance Accelerator
If you want to skip the long process of researching and vetting insurance providers, you can use the Amazon Insurance Accelerator, accessible through your Seller Central. This is a digital insurance marketplace that features pre-vetted insurance companies like Chubb and Liberty Mutual.
The Insurance Accelerator also offers a fast and simple application process that you can finish within minutes, as well as fully online purchasing capabilities. That means you can get the insurance needed to keep your store running quickly and easily.
Choosing the Right Amazon Seller Policy
While features like the Amazon Insurance Accelerator can help you find insurers more easily, it’s still a good idea to assess what makes a policy the “right” one to protect your business. Here are a few tips to help you pick the right Amazon seller insurance company:
Assess Your Insurance Needs
Amazon requires you to have $1 million in insurance, but that’s the bare minimum. Depending on your business needs, you may need to get more coverage. Consider your insurance needs and choose a coverage amount that’s appropriate for your store.
Compare Insurance Costs
When looking for policies, think about the insurance cost. Shop around and check the insurance premiums from multiple companies to find one that fits your budget. While CGL insurance typically costs $300 to $1,000 per year, there’s still a chance that you can find better deals.
Check Insurance Company Reach
One of the requirements for your seller insurance provider is global handling capability. If the insurance company can’t handle global claims, then you need to find another insurance company that fits the bill.
Fortunately, you can use the Insurance Accelerator to get through this. If a company is listed on the Accelerator, it has been vetted by Amazon, and you can purchase a policy from there without issue.
How to Upload Your Certificate of Insurance to Amazon
Once you get insured, the final step is easy.
- Log into Seller Central: Go to Settings → Account Info.
- Navigate to “Business Insurance”: Select the section for providing insurance details.
- Upload your PDF certificate: Amazon only accepts PDFs.
- Confirm your details match: Your legal entity name must match your Seller Central registration exactly.
- Wait for approval: Amazon usually approves or flags issues within 1–5 days. If they reject it, it’s usually due to issues like missing additional insured language, coverage limits that are too low, or an incomplete COI. Talk to your insurer for help with this, as they can resolve most issues quickly.
Common Mistakes Amazon Sellers Should Avoid
Many sellers run into avoidable issues that slow them down or put their accounts at risk. Keep these in mind.
- Thinking only big sellers need insurance: Amazon requires insurance once you hit $10K/month, but accidents don’t care how new you are. Getting covered early protects you from unexpected claims.
- Choosing the cheapest policy: Cheap policies often exclude exactly the products you sell. Saving $10/month isn’t worth the risk of a denied claim.
- Not reviewing exclusions: Many sellers only look at coverage limits. Exclusions are where problems hide.
- Not updating policies as you grow: If your revenue doubles but your policy is based on old numbers, the insurer might dispute claims.
- Forgetting to add new products: Adding new product categories may require a policy update; always notify your insurer.
What Happens If You Don’t Get Insurance?
Amazon rarely ignores missing insurance. Here’s what can happen:
- Amazon sends a warning: You’ll get a request to upload a Certificate of Insurance within a certain timeframe.
- Listing suppression: Your listings may be paused if you fail to submit acceptable proof.
- Account deactivation (in severe cases): This is rare but possible for repeat non-compliance.
- Personal financial liability: Without coverage, you could be personally responsible for legal claims.
Amazon seller liability insurance is ultimately for your protection, not just Amazon’s.
Key Takeaways
Being an Amazon seller is an incredible opportunity, but it comes with responsibilities. Getting insured isn’t just about complying with Amazon seller insurance requirements: it’s about safeguarding your entire business from unpredictable risk.
Whether you’re new to selling or scaling to seven figures, taking the time to secure proper Amazon seller business insurance ensures you can operate confidently and focus on what matters most: growing your brand.
