Amazon public liability insurance for sellers – what do you need to know?

Key requirements for sellers on Amazon

Every seller doing business on Amazon is required to have third-party liability (Liability) insurance. This requirement stems from the platform’s selling policy, which aims to protect both buyers and sellers. Details of the requirements on the Canadian, US and Mexican marketplaces can be found on Amazon’s website. The same applies to European markets, which the platform also reports on its account.

Why does Amazon enforce third party insurance?

Although the obligation to have third-party insurance has been in place for a long time, Amazon is now more stringent in requiring it. The aim is to ensure that every seller has adequate financial cover for business-related claims. If you sell on Amazon, you have probably recently received an email reminding you to have a third-party liability policy.

Do I have to have third-party insurance on Amazon and who does it apply to ?

The requirement to have insurance applies to all sellers who exceed certain gross turnover thresholds in a given month. These thresholds vary depending on the market in which you operate. If you reach the required sales level, you have 30 days to take out the appropriate policy. Here are the specific thresholds for the different markets:

• United States and Canada: USD 10 000
• Mexico: MXN 100 000
• Europe: EUR 5 000 (Germany, France, Italy, Spain, Netherlands), GBP 4 000 (United Kingdom), SEK 50 000 (Sweden), PLN 22 500 (Poland)

Insurance Policy Requirements

Amazon specifies exactly what conditions a third-party liability policy must meet in order to be accepted:

1. Coverage: The policy must cover product liability, personal injury and all other risks associated with your business on Amazon.
2. Minimum Coverage: The policy must provide minimum financial coverage:
   • US and Canada: $1,000,000
   • Mexico: MXN 10 000 000
   • Europe: €500,000 (Germany, France, Italy, Spain, Belgium, Netherlands)
   • United Kingdom: GBP 400 000
   • Sweden: SEK 5 000 000
   • Poland: PLN 2 225 000
3. Deductible: The maximum amount of the deductible (excess) must not exceed EUR 10,000 / GBP 10,000.
4. Additional Insureds: Amazon and its authorised representatives must be named as additional insureds.
5. Data Consistency: The name on the policy must match the name listed on the Amazon account.
6. Credibility of Insurer: The insurer must have a financial rating of at least S&P A- or AM Best A-. In Poland, of the insurance companies, PZU has an A- rating.
7. Policy Signature: The policy must be signed by you and the agent or insurance company.

What to do in the event of claims from customers?

• Claims up to €1,000 / £1,000: Amazon may indemnify the customer itself, provided valid proof of insurance and manufacturer details are provided.
• Claims over €1,000 / £1,000: For larger claims, Amazon will contact you to resolve the case together. You will need to provide proof of insurance and manufacturer details.

Consequences of the lack of insurance

Amazon does not specify direct penalties for failing to provide insurance, but failure to do so can result in account lockout. Such a block means a complete inability to sell on the marketplace in question and requires a lengthy process to unblock the account, which can take weeks or months.

Having the right insurance is key to running your business on Amazon safely and efficiently. Make sure you meet all the requirements to avoid problems and enjoy peace of mind in the event of any customer claims.