So you want to sell on Amazon? Congratulations! You're about to join the ranks of a select group of individuals who have turned their entrepreneurial dreams into a reality. But before you start listing your products for sale, there's one important thing you need to do: get insurance.
Why do you need insurance? Because even though selling on Amazon can be a lucrative endeavor, it's not without its risks. From product defects to fulfillment issues and beyond, there are a number of potential problems that could occur during the course of your business. And if you're not properly insured, you could find yourself facing some serious financial repercussions. Oh and by the way - insurance is a requirement for all Amazon sellers. Amazon requires all sellers to carry insurance, this requirement extends to FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) companies.
Don't worry, though; getting insurance for your Amazon business is easy. In this blog post, we'll give you a rundown of the different types of policies available and what they cover. We'll also provide some tips on how to get the coverage you need at a price that fits your budget. So whether you're just getting started as an Amazon seller or you've been in the game for years, read on to learn everything you need to know about Amazon seller insurance.
What Does Amazon Seller Insurance Cover?
Broadly speaking, there are three main types of insurance that are available for Amazon sellers: product liability insurance, contents insurance, and business Interruption insurance. Let's take a closer look at each one:
Product Liability Insurance: This type of policy will protect you financially if one of your products causes injury or property damage to another person. If, for example, someone were to use one of your products and then suffer a injuries as a result, they could sue you for damages. Product liability insurance would cover those damages—up to the limit specified in your policy—and help protect your business from ruin.
Contents Insurance: Contents insurance covers the physical goods that make up your inventory—in other words, it protects your inventory in the event that it is damaged or destroyed. This could include damage caused by fire, theft, or natural disasters like floods or earthquakes. If you keep your inventory in a storage unit or warehouse, contents coverage can be an important safeguard against loss.
Business Interruption Insurance: Business interruption insurance kicks in when your business is unable to operate due to an unforeseen event—such as a fire at your place of business that forces you to temporarily close shop. This type of policy can help reimburse you for lost income and help cover the costs of relocating or restarting your business.
How Much Amazon Seller Insurance Do I Need?
The answer to how much Amazon seller insurance coverage you need is as unique and personal as your business. The best way for sellers with different types of products, storage facilities or locations around the country might be completely different depending on their needs!
Why Shouldn’t You Take Out $1 Million in Liability Insurance?
$1 million is no longer enough to cover your liability insurance. One accident could end up costing more than what you have on hand! Plus, Amazon's US requirements necessitate a minimum of $1M USD limit- meaning if we conversion rate does not meet this requirement due our currency exchange rates then it will be insufficient for Canadians who shop there as well
Even with just $500k (or less!) in bodily injury coverage through an employer or personal policy? That won't cut it anymore either because those types claims often exceed whatever limits exist.
Does Amazon Sellers Insurance Cover Global Sales?
You can purchase insurance to cover domestic and global sales. However, you must state the portion of your sales from every country when completing an application for this type coverage--don't worry; one of our brokers will help make sure that all information is accurate!
As an Amazon seller, it's important to have the right insurance in place to protect yourself and your business from potential risks. There are three main types of policies available: product liability insurance, contents insurance, and business interruption insurance. Be sure to research the different options and choose the coverage that makes the most sense for you and your business. With the right policy in place, you can rest easy knowing that you're covered in case of any unexpected bumps in the road. Talk to our team today to craft the perfect policy for your business.
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