Do I need insurance?
Hi! I’m brand new to Amazon. Have yet to sell. I’ve been reading and hearing about insurance and from both sides saying I need and some saying I don’t need yet. I’ve read about the 10k a month for 3 consecutive months is when you absolutely need it. My question is before that threshold is met, Do I need the commercial insurance right before I sell my first item? If no does Amazon provide insurance for us under that threshold limit? If so what is the limits of insurance they provide? Where can I read this on the website?
Do I need insurance?
Hi! I’m brand new to Amazon. Have yet to sell. I’ve been reading and hearing about insurance and from both sides saying I need and some saying I don’t need yet. I’ve read about the 10k a month for 3 consecutive months is when you absolutely need it. My question is before that threshold is met, Do I need the commercial insurance right before I sell my first item? If no does Amazon provide insurance for us under that threshold limit? If so what is the limits of insurance they provide? Where can I read this on the website?
1 reply
Seller_X9AxWaXfNnGAl
As far as I know, Amazon has not YET started requesting proof of insurance in Cnada as they have for the US, but you can expect that it is coming.
By policy, Amazon stated that you MUST have the required insurance.
Honestly, you would be a fool to not have sufficient insurance.
You can be sued by customers, competitors, suppliers, competing brands and anyone who wants to initiate any type of litigation for any reason. The first time you get served a legal document, you can expect to spend thousands trying to dig you out of that hole. With insurance, the insurance company will cover the legal fees and the settlement, if they choose.
If you are not insured, you are actually “self insured”. That means that you are willing to bet all of your business and personal assets including what you have in any Canadian bank account, your house, your spouse’s property, your children’s future.
Amazon was only identifying prospective insurance companies for US sellers.
You should start with the insurance company you use for home and auto. If they don’t sell commercial insurance, there are insurance brokers who can help you to get what you need for the best price.
If you “plan” to be in the club where you are working to get $10k in monthly sales, you should make sure that you already have insurance. The lower your sales income, the lower your insurance premium. It will become more expensive as your sales increase.
You can find out more by doing a search for “Amazon Services Business Solutions Agreement”. Then search for insurance. Basically, it states about the $10K in monthly sales. The US site is updated to remove the 3 months - it is ever. The requirement is 1 million dollars (or pounds sterling or Euros or 10 million Pesos) - essentially about a million dollars.
If Amazon requests proof of insurance and you don’t provide the insurance certificate within 30 days, Amazon can suspend your account.
When you contact insurers, don’t reference Amazon, ecommerce, online, internet, or anything like that as it confuses the underwriters. Instead reference your business as a mail order retail company. You may be required to identify the category of products or the country of origin (which you purchase directly from). There are red flags for products that have greater risk, such as electronics from China. It is best to use suppliers and brands based in North America or Europe. Others can be risky. Japan and South Korea are also okay.
