Amazon recently issued a reminder to its sellers about the necessity of maintaining commercial liability insurance, as stipulated in their Amazon Services Business Solutions Agreement. This requirement becomes mandatory when a seller’s gross proceeds surpass specific thresholds within any given month, varying based on the region’s marketplace.
Key Insurance Requirements
- Thresholds for Insurance Requirement:
- €5,000 for sellers on Amazon sites in Germany, France, Italy, Spain, Belgium, or the Netherlands.
- £4,000 for the UK site.
- 50,000 SEK for the Swedish site.
- 22,500 PLN for the Polish site.
- Coverage Specifications: Amazon requires a minimum coverage of $1 million per occurrence, which includes product liability and public liability insurance. The policy must cover all products listed on Amazon, addressing potential claims for bodily injury or property damage due to product issues. More details can be found in the Commercial Liability Insurance Policy.
- Additional Insured Requirement: The insurance policy must name “Amazon.com Services LLC and its affiliates and assignees” as additional insured parties. This clause ensures Amazon’s protection under the seller’s insurance policy.
- Global Compliance and Claims Handling: Insurance providers must be capable of handling claims globally and maintain a financial rating of at least A- by S&P or AM Best. This is crucial for sellers who operate across multiple international Amazon marketplaces.
- Amazon Insurance Accelerator: To assist sellers in meeting these requirements, Amazon offers the Insurance Accelerator program. This program connects sellers with pre-vetted insurance providers, simplifying the process of obtaining compliant insurance policies. Sellers can easily receive and compare quotes, selecting the best coverage for their needs.
Implications for Sellers
Not securing appropriate insurance can lead to severe consequences, including the potential suspension of a seller’s account. Additionally, without adequate coverage, sellers risk significant financial losses from claims that may arise due to defective products. For more details on the implications and specific insurance requirements, sellers can refer to the Amazon Seller Central guidelines.
Steps to Compliance
Sellers must upload proof of their insurance coverage through Amazon Seller Central. This includes ensuring that the insurance provider’s information, policy details, and proof of insurance are accurately documented and submitted within the specified timeline. The step-by-step process can be found on the Business Insurance page.
In conclusion, complying with Amazon’s insurance requirements is not only a contractual obligation but also a vital step in protecting the business against unforeseen liabilities. Sellers are encouraged to regularly review and update their insurance policies to ensure compliance and secure their operations against potential risks.
