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Introduction to Insurance for Amazon

In an attempt to protect itself from Liability claims arising from faulty products (hoverboards blowing up under Christmas trees, hairdryers electrocuting people, non-compliant car seats, injury or property damage from faulty faucets, etc.), Amazon instituted insurance requirements for Third-Party Sellers (3Ps).

Amazon requires the insurer to name “ Services LLC and its affiliates and assignees” as an additional insured on the policy.

What Insurance Does Amazon Require? 

Amazon requires all 3PS who cross a threshold of $10,000 in sales in any one month to have compliant Commercial Liability Insurance. This is outlined within Seller Central. (Details available in an Appendix below).

This one month sales threshold is constantly under review. Initially, it was $1,000,000 in the Trailing 12 months. Then, it was lowered to $100,000 in the Trailing 12 months. It was further lowered to $5,000 for 3 consecutive months and now it is $10,000 in any one month (i.e. 2 Amazon billing cycles). This could even be ‘spike’ months such as Prime day sales etc.

Amazon’s insurance requirements are onerous. Once 3Ps get the insurance, they are required to upload a one page Certificate of Insurance. Failure to do so could result in suspension. Although until recently, Amazon was not enforcing this.

Amazon requires the insurer to cover all products sold on If there are certain higher risk products, the insurer has to reject the 3Ps entirely. Additionally, deductibles may not exceed $10,000 regardless of the size of the 3Ps. Finally, the insurer has to provide Amazon with 30 days notice of cancellation.

What Insurance Is Suggested vs What Amazon Requires

Assureful recommends single channel 3Ps to secure only Amazon’s basic insurance requirement i.e. $1m in limit. We recommend sellers to get a higher limit of $2m (and up to $5m for higher risk products) if the 3PS is omni-channel and/or is selling at Walmart’s minimum requirement is $2m in limit. 

What Has Amazon Said?

Under section 9 of the Amazon Services Business Solutions Agreement, the 3Ps must obtain and maintain commercial liability insurance within 30 days after exceeding  $10,000 in gross proceeds in sales in one month on, or if otherwise requested by Amazon.

Since September 2021, Amazon has been notifying 3Ps of this requirement but has been selective about account suspensions after 30 days. Amazon is now ramping up efforts to enforce section 9 of the agreement. It would start suspending seller accounts with no notice if the 3Ps have received 2 emails asking them to provide insurance or by giving 15 days notice if the 3PS has received 1 email asking them to provide insurance.

SmartScout Recommends Assureful 

Founded by former Amazon Sellers, Assureful is an insurance underwriter (not a broker) that has built a monthly-billed and usage-based liability insurance product specifically focused to Third-Party Sellers on Amazon, Walmart, eBay, Etsy etc. Assureful is 100 percent backed by the 330-year-old ‘A’ rated Lloyds of London.

The insurance is compliant with Amazon. We know and understand eCommerce and therefore are able to insure 95 percent of products sold on Amazon including but not limited to supplements, baby products, electronics, and imported products (including from China).

Other insurers will ask you to project your sales for the next 12 months. If you have a suspension/delisting or are OOS because of lines at the Port of Long Beach, your sales projections are shot and you have then overpaid for insurance. On the flip-side, if you have a great Prime Day and your actual sales exceed the declared projections, all your sales beyond your projections are uninsured opening your business up to significant risk.

Assureful is the only insurance coverage that looks at your actual sales in the last month (from all your sales channels). We are 75 percent more cost effective than our competitors and our premiums are as low as $26/month.

Who Does Assureful Cover?

In April 2023, Assureful is accepting Third-Party Sellers from the United States (Assureful is licensed nationally). Later in Q2, it will accept Third-Party Sellers from Canada, Hong Kong, and the UK. EU-based Third-Party Sellers will be covered in Q3 of 2023.

Next Steps

To get a quote, please visit us at Please also feel free to book a call.

Appendix ‘A’ - Amazon Insurance Requirements

Text below extracted from Amazon Seller Central

Insurance Policy Criteria

Your commercial liability insurance policy must meet all of the following criteria, unless otherwise required by applicable law or regulation:

  1. The insurance policy type can be either commercial general, umbrella, or excess liability and be occurrence based, except for certain product categories that are outlined in the Frequently asked questions;
  2. The policy limit must be at least USD 1 million per occurrence and in aggregate, and cover liabilities caused by or occurring in conjunction with your business operations, including products, products/completed operations and bodily injury;
  3. The deductible for any policy(ies) must not be greater than $10,000. Any deductible amount must be listed on your Certificate of Insurance;
  4. The policy must cover all sales from products you have listed on the store;
  5. The policy must name " Services LLC and its affiliates and assignees" as additional insureds;
  6. Except for single-member LLCs, your insured name must match the “legal entity” name you provided to Amazon in your Account Info. For single member LLCs, where your legal entity name is different than the name you publicly use to identify your business (“trade name,” “doing business as,” or “DBA”), it is also acceptable for your insured name to match your trade name;
  7. Your insurance provider must have global claim handling capability and a financial rating of S&P A- and/or AM Best A- or better (if S&P or AM best is not valid or used in the country where you are required to obtain insurance, a local equivalent is allowed);
  8. The policy must be completed in its entirety and signed; and
  9. Your insurance provider must give Amazon at least 30 days’ notice of cancellation, modification, or nonrenewal.

Amazon will consider exceptions to these requirements on a case-by-case basis if you are unable to secure a policy that meets these requirements. For more information about our requirements, go to Frequently Asked Questions section in the Business Insurance page.

Related Posts:

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The 5 Best SmartScout Tools for Amazon Wholesale Sellers

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