Why and When Amazon Seller Insurance Could Save Your Business

When a new business idea takes shape, we often rush to focus on why it will succeed and how to make it work best. For you as an Amazon seller, the platform offers countless opportunities: access to millions of potential customers, world-class logistics that even handle customer support, and more e-commerce success stories than any other platform combined. However, more opportunity also means more risk. Every order you ship represents not only an opportunity for profit but also a potential liability. What if a product malfunctions, causes injury, or sparks a customer claim? Amazon wants to make sure both buyers and the platform itself are protected – this is where Amazon seller insurance comes in.

In this guide, we’ll explain Amazon’s insurance requirements, the types of coverage sellers need, and how to stay fully protected while growing your business.

Why Amazon Seller Insurance Matters

Amazon’s A-to-Z Guarantee Coverage

Amazon is famously known for putting its customers before anything else. With its A-to-Z Guarantee, Amazon protects buyers if orders arrive late, damaged, or not as described, and ensures they get refunds when sellers don’t follow Amazon’s return policies. It does not directly cover injuries from faulty products, but Amazon may pay claims up to $1,000 for personal injury or property damage and then seek reimbursement from the seller. Larger claims must be handled through the seller’s liability insurance. Without proper insurance, you will have to pay these costs out of pocket, which can easily escalate to thousands of dollars depending on how large your inventory is.

Risk Protection: Claims, Lawsuits, and Product Liability

No matter how carefully you source or manufacture your products, accidents can and will happen eventually. A child’s toy with a small detachable part, an electronic device that overheats, or a skincare product that triggers an allergic reaction – all of these could result in legal claims (in Germany they regularly do). Product liability insurance protects you against lawsuits, medical costs, and property damage claims, shielding both your finances and your reputation.

Business Continuity and Account Protection

Amazon requires Professional Sellers exceeding $10,000 in sales per month to carry liability insurance. Failing to provide proof can put your account at risk of suspension. Beyond compliance, insurance ensures your business doesn’t grind to a halt when something unexpected happens. With coverage in place, you can handle claims smoothly, keep customer trust high, and your Amazon account secure. Find more information on this in the section below.

Amazon Seller Insurance Requirements

If you’re just starting out, there are many other areas of your business that need funding more urgently than insurance. However, once your business reaches a certain level, insurance becomes mandatory. 

Amazon requires seller liability insurance if you have a Professional Seller account and generate more than $10,000 in sales in a month.

The policy must provide at least $1 million in coverage per occurrence and in aggregate, protect against claims such as product liability, property damage, bodily injury, and personal injury.

Amazon also sets specific standards for the policy itself. It must:

In the last step, you are responsible for proving your coverage. You can do this by uploading a valid Certificate of Insurance (COI) in Seller Central, showing that the policy meets Amazon’s requirements and covers all products listed under your seller account.

Types of Insurance Coverage for Amazon Sellers

Let’s take a closer look at all the different forms of insurance that make sense for your business from a certain point onward.

Commercial General Liability (CGL)

The Amazon seller general liability insurance is a widely used standard. A CGL policy covers a wide range of risks, including bodily injury, property damage, personal injury, and product liability. It’s the foundation of any Amazon seller’s insurance portfolio.

Umbrella / Excess Liability

If your general liability policy doesn’t provide enough coverage, an umbrella or excess liability policy adds an extra layer of protection. This ensures you’re covered if a claim exceeds the limits of your base policy.

Business Owner’s Policy (BOP)

A BOP combines general liability with property insurance, making it ideal for sellers who also operate warehouses, offices, or physical stores. It provides broader coverage in one package, often at a more affordable rate than buying separate policies.

Product Liability

Although Amazon product liability insurance is typically included in a CGL, some sellers choose to strengthen this coverage. It specifically protects against claims that a product you sold caused injury or damage – a common risk for e-commerce businesses that sell products which go into the body (food, supplements, cosmetics), is used by children, involves electricity, or carries physical risk is most prone to liability claims.

Optional Add-ons

Depending on your business model, you may want to add other types of coverage:

Finding the Right Insurance and Submitting it to Amazon

Once you’ve determined that you need Amazon seller liability insurance, the next step is choosing the right provider and making sure Amazon receives proof of your coverage.

Finding Providers

You can speed up the process of finding suitable providers with Amazon’s Insurance Accelerator, a network of vetted insurance providers that offer policies tailored to Amazon’s requirements. Beyond this, there are also many independent brokers you can work with to explore online insurance platforms that specialize in e-commerce coverage.

Fast Online Options

Finding the right Amazon business insurance can take up a good chunk of your time, but there are several digital insurers that have streamlined the process. Some can provide quotes in minutes and issue a valid Certificate of Insurance (COI) the same day. This makes it simple for sellers to get compliant quickly without lengthy paperwork.

Solutions for International Sellers

If you’re selling into Amazon marketplaces outside your home country, you’ll need an insurer that can handle global claims. In some cases, setting up a U.S. business entity or working with international brokers may be necessary. Amazon’s Insurance Accelerator also includes providers that work with non-U.S. sellers, helping them stay compliant across multiple regions.

Submitting the Certificate of Insurance (COI)

Once your policy is active, Amazon will ask you to provide proof of this. This happens in the form of a Certificate of Insurance. You can upload this document directly in Seller Central under the “Business Insurance” section. Make sure the COI clearly lists Amazon.com (and its affiliates) as an Additional Insured and reflects all required coverage. Be sure to keep this document up to date, because failure to do so can lead to account issues or even suspension.

Final Thoughts 

Especially when your business exceeds the initial stages, good insurance will help you sleep better at night. Beyond meeting Amazon’s compliance rules, the right coverage shields you from costly claims, protects your reputation, and ensures your account stays active.

With insurance in place, you’re not just protecting against a worst-case scenario – you’re building a secure foundation for sustainable growth in an environment that is becoming more dynamic by the year. In e-commerce, peace of mind is worth just as much as profit, and Amazon seller insurance gives you both.

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