Professional online sellers on Amazon platform will need to fulfil the minimum insurance requirements set by them. Amazon will require indeed that every seller to buy a Commercial General Liability with a coverage limit up to US$1,000,000 per occurrence and in the aggregate and must include product liability, bodily injury, or personal injury, property damage. Those requirements are basic, but many sellers in Hong Kong are confused on what is it for and how much will it cost. We want to guide you through it to help e-sellers fulfilling Amazon requirements with the most affordable options on the market.
Why do you need Commercial General Liability when selling on Amazon?
The insurance will secure both Amazon and you in case of an unexpected event. But what could go wrong? Actually, it is not because you are selling online that your risks are different from any brick and mortar shop. You are facing the same risks. And the main risk is related to the product you are selling on Amazon platform. Even if you are just distributor, you carry the same risks as a manufacturer as you will be responsible for the bodily or property damage caused by an unexpected product default. Imagine that the product you are selling has a hidden default and someone get injured because of that: as you are the one selling the product, you will be the one sued, or most likely Amazon: in order for Amazon and you to be properly covered, this insurance is needed and must include Amazon.com, Inc as co insured.
Who will need to buy this insurance?
The online pro Amazon sellers who sell about the below threshold amount need to buy this insurance. Individual sellers or small pro sellers are not required to buy it. The limits over which the insurance is needed are as follow:
- Ten Thousand U.S. Dollars ($10,000) (if the Elected Country is the United States).
- Ten Thousand Canadian Dollars ($10,000) (if the Elected Country is Canada),
- One Million Japanese Yen (¥1,000,000) (if the Elected Country is Japan),
- One Hundred Thousand Mexican Pesos ($100,000) (if the Elected Country is Mexico)
Even if you do not reach these figures, you should still consider carrying an insurance policy as you will still be exposed to a liability claim.
If you don’t fulfil the requirements of Amazon, they will suspend your business. And this means the end of your online business.
How to buy Amazon sellers insurance?
Insurers will require a lot of information about your business and your product in order to generate a quote. This is not a simple policy to underwrite as price will depend on the type of product sold, volume of business, area of sales, quality certificate in place, etc… All this information is needed for insurance underwriter to assess and generate a quote. At Clema Risk Solutions, we will help you collecting quotes from various insurers to make sure you get the best rate and yet, fulfilled Amazon insurance requirement.