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Amazon Seller Insurance Requirements– Everything You Need to Know

Amazon Liability Sellers Insurance

If you are starting as an online business on Amazon, you might think you don’t need to get an Amazon Seller Insurance policy. That is a wrong idea. When you get started, you should consider the following. There may come a time when something terrible happens, even more than you typing an amazon negative keyword. At that time, you will want to recoup your losses.

Why is Insurance on Amazon Needed?

You will be responsible if something gets damaged or stolen from your home or property. In such cases, you will have to pay for the damage yourself and the costs of repair or replacement. So, it is not wise to rely on just any insurance. You will have to find the most suitable insurance for your home page. This requires proper research and comparing the options available.

There are three main types of Amazon seller insurance. You will have to know which one will work best for you. It is not difficult to do because you can get all the information you need by simply visiting the website of Amazon. Once there, you will find a list of insurance policies. After choosing the one you want, you will be required to fill in your details. 

Look at your store online on the Amazon platform as a business. Just like any other business you need to do certain things to protect it including having it insured. Even if you are using marketing agencies like Olifant Digital, they will also guide you to have insurance policies to avoid rainy days. 

Requirements of Amazon Insurance Policy

The first step you should take is to sign up for the Amazon policy. Having done that, decide on the type of insurance you need for your Amazon business. If you are an individual, you will not have to worry about business insurance. However, business owners will have to look into business insurance requirements. You will have to visit their home page for Amazon and then follow the instructions to get started with your online business.

When you visit the home page, you will see that you have to fill in your personal information. Amazon will also ask you to choose the type of business you have. The other sections will then guide you through the different areas of insurance requirements. Once you finish filling in your details, you will be able to get started with your home page.

Types of Insurance Policies

Signing up for general commercial liability or an FBA insurance policy is ideal. The policies protect your assets and help cover other financial obligations such as litigations, accidents, and injuries. Owning an Amazon policy will provide countless benefits for your store. In case of being sued, it will provide settlements, protection from bodily harm, legal fees, and property damage. 

If your company grows in the future or is already an established seller, it is a good idea to form an LLC. It is not required to form a Limited Liability Company. Still, having it in conjunction with Product liability insurance, your assets will remain safe in case of a potential lawsuit. 

What Makes You Eligible for Amazon Insurance Policy?

If you have a pro seller account on Amazon, the platform wants to have its seller get commercial general liability insurance. However, it is not mandatory. If you have an account that you manage individually, it is not required to purchase the policy.

Also, sellers that do not hit the required threshold amount need not purchase this type of insurance. The threshold sum differs from country to country. For example, if you are in Canada, the amount is Ten Thousand Canadian Dollars ($10,000); in Japan, it is One Million Japanese Yen (¥1,000,000), One Hundred Thousand Mexican Pesos ($100,000), and in the USA, it is $10,000 U.S. Dollars.

Note: If you are starting, it is wise to consider getting an FBA insurance policy since if once you hit the $10k threshold, you’ll be required to get that insurance policy. 

How to Find Liability Insurance?

It is pretty straightforward to get Commercial General Liability. All you need to do is contact the relevant companies that provide tailor-made insurances for Amazon and get a quote. The figure you will get will depend on your annual estimated revenue. The average cost is around 500 to 1000$ per year. 

Keep in mind when contacting the sellers tell them beforehand that you are an Amazon seller. Also, contact multiple companies to get quotes based on your requirements. 

Amazon Support for Its Sellers

Amazon also provides its users with valuable tools to help them make the right choices. They provide tips on how to get started with their business and essential information on business insurance requirements. These features will make things simpler for you and your customers. However, if you want to complete the process online, you will have to take care of these insurance requirements yourself.

Amazon provides a great support system to its sellers. If you are starting out in an electronic items business, you will need to register and pay the required taxes. Amazon provides its sellers with free insurance policies for those who are selling goods with Amazon. You will also find other tools on the site, such as insurance calculators and shopping guides, to help you make suitable investment and insurance decisions.


To protect your thriving e-commerce business, having the FBA insurance policy plan or Amazon vendor insurance policy plan is essential to the continued success of your store.  In this global digital age where there are laws to protect customers, many abuse it and sue sellers for illegal profits. It is sensible to guard yourself against potential circumstances that may destroy your organization. 

If you believe that you are maybe not prepared to buy insurance as your Amazon company is still new, then make acquiring it your primary concern.  It would be heartbreaking to end up in a situation where you have to lose everything you worked hard for!

More on this topic:

How to Start an Amazon Business from Scratch

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