Amazon Further Tightens Liability-Insurance Rules for Small Sellers - EcommerceBytes

Summary

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

That means small sellers will incur greater costs, since no-deductible insurance plans usually come with higher premiums.

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

That means small sellers will incur greater costs, since no-deductible insurance plans usually come with higher premiums.

Sellers expressed frustration at the policy change that will take effect 7 days after the announcement. “How can they change the rules on the deductible at this late stage? People have obtained policies as per the specifics laid out by Amazon a few months ago,” one seller wrote in response.

“My thoughts exactly,” another seller replied, “does this mean every seller that has uploaded a COI that was verified needs to have its policy rewritten to comply with this? And by June 27???”

The change follows a tightening of the requirements for small sellers last fall, which you can read about in this AuctionBytes Blog post (“Small Sellers Getting Sucked into Amazon Insurance Mandate”).

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

Updates to the Commercial Liability Insurance Program Policy

Effective June 27, 2022, our United States Commercial Liability Insurance Program policy will be updated with the following changes:

Your policy can include a deductible if (i) your gross proceeds from sales of your products in the Amazon.com store exceed USD 1 million in the last 12 months, and (ii) the deductible is listed on your Certificate of Insurance;

For single-member LLCs, the insured name can match either your legal entity name or the name you publicly use to identify your business (“trade name,” “doing business as,” or “DBA”);

Go to the ‘frequently asked questions’ section on the Business Insurance page for guidance on how to get commercial liability insurance.