Announcement: Look out for details of the upcoming Amazon Insurance webinar on 31st March 2021, which I'm co-hosting with the team from Sourcing from India - Amazon FBA Private Label and featuring special guests:
- Ashlin Hadden, Owner, Ashlin Hadden Insurance (USA)
- Peter Heibloem, Director, Online Sellers Insurance (Australia)
- Sunil Chugani, CEO, Galaxy Insurance Consultants Pte. Ltd. (Singapore)
Corporate insurance is something many startups put off due to its cost and complexity.
When starting your business, your budget might be limited and you would understandably want to focus on investing as much as possible into what will generate a return. Therefore insurance might not be the first thing on your mind.
We commonly get health and medical insurance, home insurance, car insurance, travel insurance, etc.. Some of these such as travel or car insurance might be for something that is worth far less than your business!
If you can afford the it, or when the business has grown to a certain scale, you should seriously look into getting insurance coverage. And if your business involves selling on Amazon, there is an actual requirement for commercial general liability insurance once you reach a certain threshold in gross revenue on Amazon.
When starting your business, your budget might be limited and you would understandably want to focus on investing as much as possible into what will generate a return. Therefore insurance might not be the first thing on your mind.
We commonly get health and medical insurance, home insurance, car insurance, travel insurance, etc.. Some of these such as travel or car insurance might be for something that is worth far less than your business!
If you can afford the it, or when the business has grown to a certain scale, you should seriously look into getting insurance coverage. And if your business involves selling on Amazon, there is an actual requirement for commercial general liability insurance once you reach a certain threshold in gross revenue on Amazon.
Amazon's Requirements for Seller Insurance
Amazon requires sellers to obtain Commercial General Liability (CGL) Insurance once they meet the following criteria:
The seller's CGL insurance must:
You can read the full policy on these 2 pages:
Amazon's requirements are quite reasonable, allowing new sellers to start without incurring insurance expenses until you grow your Amazon sales above $10,000 in consistent monthly sales.
- Pro Merchant Seller Account.
- Gross monthly sales of more than the applicable monthly insurance threshold*, for 3 consecutive months.
- The applicable monthly insurance thresholds are USD10,000 in the US, CAD10,000 for Canada, and MXN10,000,000 for Mexico.
The seller's CGL insurance must:
- State that "Amazon.com, Inc., its affiliates and assignees are additional insureds, as their interests may appear".
- "cover up to $1,000,000 per occurrence and in the aggregate and must include product liability, bodily injury, or personal injury, property damage, and other requirements as stated in the Amazon Services Business Solutions Agreement. "
You can read the full policy on these 2 pages:
- https://sellercentral.amazon.com/gp/help/help.html?itemID=G200386300&language=en_US&ref=ag_G200386300_cont_521
- Amazon Services Business Solutions Agreement: https://sellercentral.amazon.com/gp/help/1791?language=en_US&ref=ag_1791_cont_G200386300 (clause 9 and Definitions (after clause 18) for "Insurance Limits" and Insurance Threshold")
Amazon's requirements are quite reasonable, allowing new sellers to start without incurring insurance expenses until you grow your Amazon sales above $10,000 in consistent monthly sales.
Where to Get Amazon Compliant Insurance
Where you obtain insurance depends largely on the country in which your business or company is registered.
As a seller on the US marketplace who is based in Singapore and Australia, it has been a challenge to find an insurer who is willing to underwrite an insurance policy that covers Amazon and sales in the US.
Finally after years of searching and talking to various providers, there are now viable and affordable options for sellers from Australia and Singapore, in addition to US companies.
As a seller on the US marketplace who is based in Singapore and Australia, it has been a challenge to find an insurer who is willing to underwrite an insurance policy that covers Amazon and sales in the US.
Finally after years of searching and talking to various providers, there are now viable and affordable options for sellers from Australia and Singapore, in addition to US companies.
Country of Incorporation |
Insurance Provider |
US Entity |
|
Australian Entity |
|
Singapore Entity |
How Much are the Insurance Premiums?
The annual premium depends on various factors such as what products you sell, your country of incorporation and the countries you need coverage for.
Contact the applicable insurance provider for your country from the table above. You will need to provide them with your business information, products details, etc., in order for them to give you a quotation.
In general, expect the annual premium to start from about $2,500 to $3,000 in your local currency if you are a private label seller. The premiums would be higher for riskier products such as supplements.
Contact the applicable insurance provider for your country from the table above. You will need to provide them with your business information, products details, etc., in order for them to give you a quotation.
In general, expect the annual premium to start from about $2,500 to $3,000 in your local currency if you are a private label seller. The premiums would be higher for riskier products such as supplements.