Amazon Seller Business Insurance:  What You Need to Know

Updated by Courtney Hayes

Setting up shop on Amazon is a huge opportunity, but it also comes with some complex requirements.

One of the most important? Business insurance.

Whether you’re just learning about Amazon’s insurance rules or already shopping for a policy, this guide will walk you through what you need, why it matters, and how to get covered with less stress.

What Insurance Do I Need to Sell on Amazon?

If you’re a professional seller and your monthly gross sales top $10,000, Amazon requires you to carry general liability insurance, also known as commercial general liability.

Think of it as a safety net for common risks, such as:

• Third-party accidents
• Property damage
• Advertising injury
• Product liability

Why Does Amazon Require General Liability Insurance?

The short answer: product liability.

Amazon doesn’t want to be responsible for faulty products sold through its platform — that liability falls on you, the seller.

For example, imagine you sell custom running shirts on Amazon. A batch is made with a dye that causes skin irritation, but the label doesn’t mention the risk. If a customer has a reaction and sues, your general liability policy could step in to cover legal fees and potential settlements (up to your policy limit).

Breaking Down Amazon’s Insurance Requirements

Knowing you need insurance is one thing, but figuring out exactly what Amazon requires is another. Here’s a plain-English version of some of the policy essentials from the Amazon Services Business Solutions Agreement:¹

• Policy type: You must obtain commercial liability insurance within 30 days after exceeding $10,000 in Amazon sales in a single month.
• Coverage limits: At least $1 million per occurrence.
• Scope of coverage: Your business operations, all products, completed operations, and bodily injury. 
• Product liability: Your policy must also specifically include product liability coverage.
• Deductible: No higher than $10,000.
• Name match: Insured name must match your legal entity name (or DBA, if applicable).
• Additional insured: “Amazon.com Services LLC and its affiliates” must be added to your policy.
• Insurer qualifications: A financial rating of “A-” or better by either Standard & Poor’s or A.M. Best.

These requirements are in effect as of the date this article is published and may change in the future, so make sure to check them or speak with an insurance professional before purchasing a policy.

Navigating requirements like these can feel like a lot, especially when you’re also trying to manage listings, track orders, and keep customers happy.

That’s where Simply Business can help — we specialize in policies that check all of Amazon’s boxes. We also partner with WooCommerce, a tool that lets you sync your Amazon listings with your own online store. It’s one way to simplify your operations and keep your business running smoothly, while we take the guesswork out of insurance.

What Else Can My General Liability Insurance Cover?

Beyond Amazon compliance, general liability insurance also can protect you from risks that can pop up in everyday business. A few examples:

• Advertising injury: Maybe you launch an online campaign to stand out from competitors but accidentally say something that lands you in legal hot water. Your policy could help cover the costs of a lawsuit.
• Property damage: Say you’re meeting with a vendor and you accidentally damage their equipment. Coverage could help pay for repairs and legal fees.
• Third-party accidents: If a contractor visits your home office and trips on a rug and falls, your homeowner’s policy won’t cover it — but general liability often will.

The right insurance coverage isn’t just about meeting Amazon’s requirements. It’s about protecting yourself from the kinds of risks that can happen to any small business owner.

Do I Need More than General Liability?

General liability covers a lot, but some sellers want a little more protection. And many small business owners choose a Business Owner’s Policy (BOP), because it bundles multiple coverages into one simple, affordable package.

A BOP typically includes:

• General liability insurance
• Commercial property insurance
• Business interruption insurance

It may be worth considering if you:

• Own or rent a workspace
• Keep inventory or valuable equipment
• Want income protection if your business must close temporarily

Ready to Get Covered?

Business insurance doesn’t have to be complicated — and with Simply Business, it isn’t. Just answer a few easy questions using our free quote tool, and you could see policy options in minutes from insurers who specialize in covering online retailers.
If you have any questions along the way, we can help there, too — call 855-708-2131 to speak to one of our licensed insurance agents.

And if you’re looking for more information about selling on Amazon, we have these helpful articles:

6 Biggest Benefits of Ecommerce Business Insurance

How Much Does It Cost to Get Insurance for Sellers on Amazon?

Having General Liability Insurance to Sell on Amazon

1. https://sellercentral.amazon.com/help/hub/reference/external/G200386300 ↩︎