Amazon further tightens liability insurance rules for small sellers

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Amazon is strengthening its liability insurance policy for low-volume sellers. Previously, Amazon required sellers to obtain commercial liability insurance plans with deductibles of up to $10,000. Now, sellers with gross sales of $1 million or less may not have a deductible as of June 27, 2022.

This means that smaller sellers will incur higher costs, as insurance plans with no deductible usually come with higher premiums.

Sellers have expressed frustration with the policy change which will take effect 7 days after the announcement. “How can they change the rules on the franchise at this late stage? People got policies according to details set by Amazon a few months ago,” one seller wrote in response.

“Exactly what I think,” replied another seller, “does this mean that every seller who has uploaded a COI that has been verified must have their policy rewritten to comply? And by the 27th June ???

The change follows a tightening of requirements for small sellers last fall, which you can read about in this AuctionBytes blog post (“Small Sellers Get Sucked Into Amazon’s Insurance Mandate”).

The following is the announcement Amazon published on Monday, June 20, 2022:

Commercial General Liability Insurance Program Policy Updates
Effective June 27, 2022, our US Commercial General Liability policy will be updated with the following changes:

  • Your policy may include an excess if (i) your gross proceeds from the sale of your products on the Amazon.com store exceed $1 million during the last 12 months, and (ii) the excess is shown on your certificate of insurance ;
  • For single member LLCs, the insured name may be either the name of your legal entity or the name you use publicly to identify your business (“trade name”, “doing business as” or “ DBA”);

Go to the “Frequently Asked Questions” section of the Business Insurance page for advice on how to get commercial liability insurance.

Ina Steiner

Ina Steiner
Ina Steiner is the co-founder and editor of EcommerceBytes and has been reporting on e-commerce since 1999. She is a widely cited authority on marketplace selling and is the author of “Turn eBay Data Into Dollars” ( McGraw-Hill 2006). His blog was featured in the book “Blogging Heroes” (Wiley 2008). She is a member of the Online News Association (September 2005 – present) and Investigative Journalists and Editors (March 2006 – present). Follow her on Twitter at @ecommercebytes and send topical tips to [email protected] See disclosure at EcommerceBytes.com/disclosure/.
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