Overview

Amazon requires third-party sellers to carry commercial liability insurance once they hit certain sales thresholds. This policy protects sellers from claims related to the products they sell and is a mandatory part of operating on the Amazon marketplace. Understanding the specific requirements can help sellers secure compliant coverage without delays or account issues.

Key Points / What Sellers Need to Know

• Insurance trigger threshold — Sellers must obtain commercial liability insurance within 30 days of exceeding $10,000 in gross proceeds in a single month on Amazon.com, or sooner if Amazon specifically requests it.
• Accepted policy types — Amazon accepts commercial general liability, umbrella liability, or excess liability insurance policies.
• Minimum coverage amount — Policies must carry at least $1 million per occurrence and $1 million in aggregate, covering bodily injury and product-related liabilities.
• Amazon must be named as additional insured — The policy must list "Amazon.com Services LLC and its affiliates and assignees" as additional insureds.
• Maximum deductible — The deductible cannot exceed $10,000, and the deductible amount must be clearly listed on the certificate of insurance.

Policy Requirements in Detail

Amazon has established specific criteria that every seller's commercial liability insurance policy must meet. The policy must be written on an "occurrence basis," which covers incidents that happen during the policy period regardless of when a claim is filed. If a seller cannot obtain an occurrence-based policy for certain product categories, Amazon allows a "claims-made" policy as an alternative — sellers should consult the frequently asked questions section on Seller Central and speak with their insurer about this option. The coverage must apply to all products the seller lists for sale on Amazon.com, and the policy must not contain any sunset clause that would limit future claims.

Insurance Provider Standards

Not just any insurance provider will satisfy Amazon's requirements. The insurer must have global claim handling capability and carry a financial strength rating of at least A- from S&P or A- from AM Best. For sellers in countries where these rating agencies are not commonly used, a local equivalent rating is acceptable. The policy documentation must be completed in full and signed by an authorized representative of the insurance company. Additionally, the insurance provider is required to give Amazon at least 30 days' notice before any cancellation, modification, or non-renewal of the policy.