Wednesday, July 24, 2024

How To Get Amazon Liability Insurance For ALL Amazon Sellers

Table of Contents

1. Introduction

2. Understanding Liability Insurance

3. Benefits of Having Liability Insurance

4. Cost of Liability Insurance

5. Types of Products and Insurance Costs

6. How to Obtain a Certificate of Insurance

7. Getting Business Insurance for Non-US Sellers

8. Alternative Solutions for Non-US Sellers

9. Step-by-Step Guide to Uploading Insurance Certificate on Amazon

10. Conclusion

Introduction

🔍 **Understanding Liability Insurance**

In today’s video, we will delve into the topic of liability insurance for Amazon sellers. If you’ve recently received an email from Amazon regarding this requirement, you might be wondering what it is, how to obtain it, and how much it costs. Don’t worry, I’ve got you covered! Whether you’re starting an Amazon FBA business or have been hit with the email, this comprehensive guide will provide you with all the information you need.

Understanding Liability Insurance

Liability insurance is a crucial aspect of selling on Amazon, especially now that it is being enforced for sellers generating over $10,000 in monthly sales. This insurance protects you against general liability claims related to your products. For example, if a customer sues you for false advertising because they didn’t achieve the weight loss results you guaranteed, liability insurance will cover you. It also includes product liability, safeguarding you against claims arising from incidents like a child choking on your product or someone experiencing a skin rash from your skincare item.

Benefits of Having Liability Insurance

👍 **Protection and Compliance**

The primary benefit of having liability insurance is that it ensures compliance with Amazon’s requirements. Without it, you won’t be able to sell on the platform if your monthly sales exceed $10,000. By obtaining liability insurance, you protect your business and products from potential lawsuits, giving you peace of mind.

Cost of Liability Insurance

💰 **Determining Factors**

The cost of liability insurance varies depending on the type of products you sell. For non-private label businesses like retail arbitrage or wholesale, the average annual cost ranges from $500 to $700. However, if you’re involved in private label selling, the cost may be slightly higher, around $1,000 per year or under $100 per month. Keep in mind that high-risk products, such as skincare or ingestible items, will incur higher insurance costs due to the increased likelihood of lawsuits.

Types of Products and Insurance Costs

📦 **Understanding Risk Categories**

Certain product categories are considered high risk, leading to higher insurance costs. These categories include skincare products, body lotions, and items intended for ingestion, such as supplements or edible goods. On the other hand, low-risk products like napkin holders or home decor items generally have lower insurance costs. It’s essential to consider the risk level of your products when estimating insurance expenses.

How to Obtain a Certificate of Insurance

📝 **Step-by-Step Process**

To meet Amazon’s requirement of uploading a certificate of insurance, you need to follow a few steps. Firstly, you’ll need to acquire business insurance, which typically takes one to two days for wholesale or retail arbitrage and four to five days for private label sellers. Once you have your insurance certificate, you can proceed to upload it on Amazon’s platform. This process ensures you are in compliance and can continue selling without further documentation requests.

Getting Business Insurance for Non-US Sellers

🌍 **Challenges for International Sellers**

If you’re an Amazon seller residing outside the United States, obtaining business insurance can be a bit more complex. Most US insurance companies will decline your application if you provide a foreign address. However, there are solutions available. One option is to obtain a US EIN number and an address in the US. Several services act as registered agents, providing you with a US address and an EIN number for a fee. Another alternative is to explore global insurance options, although they tend to be more expensive than obtaining insurance in the specific market you’re selling in.

Alternative Solutions for Non-US Sellers

🌐 **Recommended Services**

For non-US sellers, there are a few recommended services that can assist in obtaining business insurance. Ashlynn Hadden Insurance, recommended by Helium10 and various Amazon FBA Facebook groups, specializes in insurance for Amazon sellers. They offer a comprehensive service, including an address in the US and an EIN number, allowing you to fulfill Amazon’s requirements. Another service worth considering is Via Box, which provides a US address for sellers outside the country. Both options offer viable solutions for non-US sellers looking to obtain business insurance.

Step-by-Step Guide to Uploading Insurance Certificate on Amazon

📄 **Ensuring Compliance**

To upload your certificate of insurance on Amazon, follow these steps:

1. Visit the “Business Insurance” section on Amazon’s platform.

2. If you already have insurance, skip to step 2. Otherwise, consider using one of Amazon’s recommended insurance companies, such as Simply Business.

3. Fill in the required information, including the insurance provider’s name, the insured company’s name, the insurance policy number, and the policy start and end dates. This information can be found on your insurance certificate.

4. If you purchased insurance from one of Amazon’s recommended providers, check the corresponding box.

5. Upload your certificate of insurance.

6. Submit the information.

7. Once approved, you are in compliance with Amazon’s requirements, and you can continue selling without further documentation requests.

Conclusion

🎉 **Protecting Your Business**

Obtaining liability insurance is a crucial step for Amazon sellers, especially those generating over $10,000 in monthly sales. It not only ensures compliance with Amazon’s requirements but also protects your business and products from potential lawsuits. By understanding the benefits, costs, and steps involved in obtaining insurance, you can confidently navigate this requirement and focus on growing your Amazon FBA business.

**Highlights:**

– Liability insurance is now required for Amazon sellers generating over $10,000 in monthly sales.

– Liability insurance protects against general and product liability claims.

– Costs vary depending on the type of products sold, with high-risk products incurring higher insurance expenses.

– Non-US sellers can obtain business insurance by using registered agent services or exploring global insurance options.

– Uploading a certificate of insurance on Amazon ensures compliance with their requirements.

**FAQ:**

Q: Why is liability insurance required for Amazon sellers?

A: Liability insurance is required to protect sellers and ensure compliance with Amazon’s policies. It safeguards against potential lawsuits related to product liability and false advertising claims.

Q: How much does liability insurance cost for Amazon sellers?

A: The cost of liability insurance varies depending on the type of products sold. For non-private label businesses, the average annual cost ranges from $500 to $700. Private label sellers may incur slightly higher costs, around $1,000 per year.

Q: Can non-US sellers obtain business insurance for selling on Amazon?

A: Yes, non-US sellers can obtain business insurance by using registered agent services that provide a US address and an EIN number. Alternatively, global insurance options are available, although they tend to be more expensive.

Q: How long does it take to obtain business insurance?

A: The turnaround time for obtaining business insurance is typically one to two days for wholesale or retail arbitrage and four to five days for private label sellers.

Q: What happens if I don’t have liability insurance as an Amazon seller?

A: Without liability insurance, you won’t be able to sell on Amazon if your monthly sales exceed $10,000. It is essential to obtain insurance to comply with Amazon’s requirements and protect your business from potential lawsuits.