If you’re an Amazon seller, chances are you’ve noticed some seismic changes in the e-retail landscape these last few years.
Online sellers have seen a significant uptick in sales since the start of the COVID-19 pandemic, as more shoppers swap traditional brick-and-mortar shops for virtual shop fronts.
Lockdown or not, it’s a trend that seems here to stay. Consumers have embraced the speed and convenience of shopping online. And that’s nothing short of good news for your bottom line, of course.
That said, there’s a balance to be had. If something goes wrong and your business takes a hit, you could see your funds drain away quicker than a blink of an eye.
So, now might be the time to bag a little something for yourself for a change. Something in the shape of Amazon seller’s insurance, perhaps. Here’s why.
Who'd have thunk it?
If adjusting to life during a pandemic has taught us anything, it’s to expect the unexpected.
Like a kitchen gadget that sparks a fire in someone’s home after its batteries overheat. Or a customer who sues you after the heavy ornament they’ve ordered slips out of its safety packaging and injures their foot.
Thankfully, accidents like these aren’t in the main. But it takes only one of them to make a sizeable dent in your business.
Rightly or wrongly, you’ll have to defend yourself – and pay out of your own pocket to do it, too. Plus you’ll need to figure in court costs, legal representation and possibly also compensation, likely amounting to several thousands euros.
Unless you have Amazon seller’s insurance that is, which’ll do all that for you.
Why do I need Amazon seller's insurance?
As a third-party seller, you can’t assume the platform you sell on will pick up your legal tab. Or that the injured party will chase after the bigger boys for compensation, and not you. Also, if you occasionally ship to countries that err on the litigious side, like the States, there’s every reason to be careful there too.
That’s where Amazon product liability insurance comes into play. It covers you if someone claims against you for damages. In other words, where something you’ve sold has injured someone, damaged their property or made them sick.
You have a case to argue – but you don’t have to do it yourself. Product liability insurance for Amazon sellers covers the costs of a lawyer who’ll represent you in court. If it turns out you have to pay damages to the injured party, it’ll cover that too.
Insurance requirements for selling on Amazon
In Estonia, General Liability insurance does not include Product Liability insurance, and you have to request it as an endorsement or as separate product. Some Amazon sellers may need commercial umbrella insurance (complex of insurances) to boost their liability coverage limits.
Amazon requires business insurance for Amazon Pro Merchants and sellers with gross proceeds of over 10 000 US dollars during any month from sales on its platform. According to the Amazon Services Business Solutions Agreement, the minimum requirements are one million euros per-occurrence and one million euros aggregate limits of commercial general liability insurance and product liability insurance.
Your insurance must be valid (ie must cover the dates you’re trading and have been bought through a reliable insurer). Your policies must name Amazon and its assignees as additional insureds.
Amazon sellers looking for safe, reliable cover for their products. So whether you trade on Amazon US or across a number of platforms, you’re covered if a customer accuses your products of causing them loss, damage or injury. If things escalate and sparks start to fly, you can bank on knowing that your insurer will step in to settle the claim.
Tough breaks
By the very nature of the way they do things, most Amazon sellers have little to no contact with the public or anyone else connected to their business. So there’s no need for insurance there. Except that’s not true, is it?
Even if you pack and ship everything from home, you’re still likely to have couriers come to your door (and often in a rush). And though you might not be meeting face-to-face with suppliers now, there’s every chance that you will in the future.
Public liability insurance covers your liability if a member of the public gets injured as a result of coming into contact with your business.
So if the postie trips over a loose paving stone in your driveway and breaks a hip, or your pop-up stall topples over and takes someone down with it, you’re not left shouldering the bill yourself. Because public liability covers occasional selling at events and markets too.
Good buy or goodbye?
Lastly, it’s worth thinking about one of your most important assets: your stock. Without it, you can’t sell. And if you can’t sell, you don’t have a business.
If, like most sellers, you store, sell, pack and ship most of your products from home, you might assume your home insurance policy would compensate you if any of it gets lost, damaged or stolen.
Except there’s every chance it won’t. Home insurance is typically designed to cover domestic property and so insurers generally won’t cover your business losses.
Stock and property insurance, on the other hand, takes care of any stock or equipment connected with your business.
It pays to repair or replace your stock if light fingers or a burst pipe mean you don’t have any to sell. And it also covers the things you need to sell in the first place ie your PC, printer, desk etc.
Before you decide exactly what insurance you need, it’s worth checking up on Amazon’s requirements for selling in the UK and Europe, as set out in their sellers’ agreement (or Europe Business Solutions Agreement, if you want to look it up).
For help on insurance for Amazon sellers, call us on +372 3838 118.
Or write an email: info@inpro.ee
