Amazon Seller Insurance

Amazon Seller Insurance

Customized business insurance coverage for Amazon sellers in Canada

Product liability insurance for Amazon sellers provides financial protection for retailers from the risks and costs associated with third-party claims or lawsuits.

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Product liability insurance for Amazon sellers

Whether you use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) to deliver your products to customers, Amazon requires all sellers to carry insurance.

Product liability insurance is designed for any business that sells, manufactures, or distributes a product to consumers. It is essential coverage for online retailers, e-commerce businesses, and brick-and-mortar stores because it protects against claims alleging third-party property damage or bodily injury caused to the buyer by any product you sell, manufacture, or distribute.

Yes.  As of September 1, 2021, Amazon requires all sellers to carry liability insurance who earn more than $10,000 in monthly sales. Amazon seller insurance from Zensurance helps Canadian retailers meet Amazon’s insurance requirements, including:

  • A policy with a limit of at least $1 million per occurrence and in aggregate covers liabilities caused by or occurring in conjunction with your business operations, including products, property damage, and bodily injury.
  • The insurance policy type can be either commercial general liability, umbrella, or excess liability and be occurrence-based.

Whether your business is a private label seller, wholesaler, or retail shop that uses Amazon or any online marketplace, including eBay, Etsy, and Wayfair, it’s vital to safeguard your company against any unknown risks that may arise.

A comprehensive Amazon sellers insurance package will typically include the following coverages:

  • Product Liability Insurance: Product liability coverage is a must-have for retailers. It is typically included in a CGL policy, and it protects against claims alleging third-party property damage or bodily injury caused by a product you manufacture, distribute, or sell to a consumer.

Damages covered by product liability are usually the result of a defect in the design, manufacturing, or marketing, such as an incorrect label or a lack of safety warnings. Also, if you import or export products outside of North America, check with your broker to ensure that the products meet industry standards.

  • Commercial General Liability Insurance (CGL): As an Amazon seller, you conduct your business online. CGL insurance, best known as slip-and-fall insurance, protects you against the day-to-day risks that can happen when interacting with third parties, such as claims of bodily injury or property damage. However, CGL is actually an amalgamation of a number of coverages that are designed to allow your business to grow. Specifically:
    • Distribution contracts as per the Amazon insurance requirements
    • Event, kiosk, or trade shows to allow you to promote your business through additional sales channels
    • Landlord requirements
  • Cyber Liability Insurance: For any online business or Amazon seller, cyber liability insurance is one of the most critical coverages to have for selling products online, especially if you’re storing your customers’ data. Cyber liability insurance covers costs associated with electronic incidents, such as cyber-attacks.

For example, suppose an employee clicks on a malicious link and accidentally gives hackers access to your customer database, compromising their financial data. In that case, cyber liability insurance could cover the cost to notify your customers and repair your data systems, as well as any legal expenses that result from a data breach.

  • Commercial Property Insurance: If you store your product inventory in a location like a warehouse, have a brick-and-mortar shop, or operate your business from home, you need commercial property insurance.

Commercial property insurance protects your physical location, as well as its contents (including your inventory) from insured risks that occur beyond your control, like a fire, theft, or flood. It’s a common misconception that home-based businesses are covered through a personal homeowner insurance policy. Most home insurance policies exclude business-related claims.

Carrying commercial property insurance gives you the option of getting business interruption coverage, which reimburses the net income lost following an insured event. It may also cover overhead costs, employee wages, and other costs associated with temporarily closing your business. However, business interruption coverage does not cover income lost due to a pandemic, infectious disease, or government-mandated closure.

Amazon sellers can expect to pay anywhere from $400 to $3000 per year for a commercial general liability insurance policy with a $2 million limit, but the precise amount you pay is based on several factors, including:

  • Your business’s location
  • The products you sell
  • Your annual and projected revenue
  • Your years of experience
  • How many employees you have
  • Any previous insurance claims you may have made

Zensurance helps Amazon sellers get the customized insurance coverage they need to manage their risks.

More than 100,000 Canadian entrepreneurs and small business owners trust Zensurance to protect them and cover their needs with comprehensive coverage. We make it straightforward to get a fast, online quote, speak to one of our licensed brokers, and get your certificate of insurance.

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Common claims scenarios

Amazon product box

Problem: You ship a product to a customer as per their order. Whether it malfunctions or is used improperly, the customer sues you claiming bodily injury.

Outcome: Your product liability coverage may cover any third-party bodily injury claims, including medical expenses, as well as any legal fees you face to defend yourself.

living room flood

Problem: A flood significantly damages your home-based business, including your inventory, technology systems, and the property rendering it uninhabitable.

Outcome: Your commercial property coverage may cover the costs to repair your workspace and replace its contents, and your business interruption coverage can reimburse the income your business lost when closed while repairs were underway.

cyber criminal

Problem: Your company’s servers that store your customers’ information is hacked, and your customers’ financial data is stolen.

Outcome: Your cyber liability coverage may cover the cost to repair your technology systems and any legal expenses arising from the data breach.

Frequently asked questions

Does product liability insurance cover me if I also sell on other third-party marketplaces?

Yes. Whether your business is a private label seller, wholesaler, or retail shop that uses Amazon or any online marketplace including eBay, Etsy, and Wayfair, a customized product liability insurance policy is designed to cover you for third-party bodily injury and third-party property damage claims caused to a customer by a product you sold to them.

Will Amazon sellers insurance cover me for all the products I sell on the Amazon Marketplace?

Yes. A customized Amazon sellers insurance package from Zensurance is designed to cover the products you sell, design, manufacture, or distribute to consumers, whether a private label seller or a professional seller. Amazon sellers insurance protects you and your business from unforeseen circumstances, including legal fees and settlements and third-party property damage and third-party bodily injury claims.

How much insurance coverage do I need to sell products on Amazon?

Amazon requires all sellers to carry liability insurance if they earn $10,000 in monthly sales with a policy that has at least $1 million of coverage per occurrence and in aggregate. Speak to one of our knowledgeable brokers if you have any questions.

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