You Need to Be Insured
As an Amazon seller, you need insurance to meet Amazon’s guidelines as well as to protect your growing business. The type of coverage needed varies based on your account specifics. Let’s take a look at a few common examples:
Professional Seller Account: In order to have this type of account, you must have a one million dollar general liability policy in place that lists “Amazon.com, Inc., and its affiliates and assignee’s” as additional insureds. You’ll also need to provide Amazon with a certificate of insurance for your policy.
Private-Label Sellers: If you design, manufacture, sell or distribute private-label products, you need to have an insurance policy. This is especially important as more of the risk falls to you and your business if anything should go wrong with your products. Whether you are manufacturing your own products or having that work subcontracted out with a supplier, there is risk exposure for you as a merchant.
In either case, look for a policy that includes coverage for bodily injury, property damage and products liability. Bodily injury coverage helps pay for another individual’s physical injury that occurred as a result of injury or death caused by a product sold to them. Property damage liability coverage helps pay for damages caused to another person’s belongings or properties up to your policy limits. Products liability covers the insured policyholder in the event that they are brought into a lawsuit as a result of their products causing bodily injury or physical damage.
AMAZON’S PROFESSIONAL SELLING PLAN INSURANCE REQUIREMENTS
Sellers with professional selling plans on Amazon.com must provide proof of Commercial General Liability insurance. This insurance, obtained at the seller’s expense, shall cover up to $1,000,000 per occurrence and in the aggregate and must include products liability, bodily injury, or personal injury, property damage, and other requirements as stated in the Participation Agreement. The insurance must indicate that “Amazon.com, Inc., and its affiliates and assignees” are added as additional insureds. The Certificate of Insurance must be the original document, contain an additional insured endorsement, list all seller’s subsidiaries or DBAs covered by the certificate provided, provide at least 30 days’ notice of cancellation, modification, or non-renewal, show complete insurance carrier names as listed in the A.M. Best Property & Casualty Guide, be completed in its entirety and signed. You may also satisfy the insurance limits by using any combination of Commercial General Liability and Umbrella and/or Excess Liability insurance.
Not All Insurance Agents Are Created Equal
When insuring your livelihood, you need to work with an agent who truly understands your business. It’s also helpful to have a basic understanding of the two main types of insurance agents: independent versus captive. An independent agent (such as WELL Insurance) is able to quote your policy with multiple companies to find the best coverage at the best price for that specific seller and risk. Captive agents only work with their own company, which limits your policy options to what is available from that insurance agency.
Different sellers have diverse needs. Depending on what products are being sold, the policy may need to be written in a very specific way. For example, if a merchant is selling a private-label item that is manufactured in China, that seller is now a manufacturer, not simply an online seller. Many Amazon merchants are unaware of this distinction and have their policy written incorrectly. This means that the company may have to pay the loss when a claim occurs.
Don’t rely on “maybe” insurance. Instead, take the time to ask your agent the right questions and make sure that you are properly insured from the start. Ask if your insurance agent has any experience with eCommerce businesses and how long they have been writing these types of policies. While eCommerce is fairly new in the insurance world, you should find an agent who is familiar with the industry in order to get the best possible protection for your business.