Sam Carter, Blogger for Profit Runner
Published: 10th June 2022
Are you thinking of setting up an Amazon business? Are you already selling but have yet to purchase insurance?
We discuss the thorny topic of insurance and help you decide whether you need Amazon seller insurance for your business.
Spoiler alert - this blog does not constitute or replace specialist insurance advice!
Bonus: Get £20 when you follow this link and buy Amazon business insurance from PolicyBee.
Pssst... This an affiliate link so we earn a small commission if you purchase insurance using the link above.
In short, yes: Once your turnover exceeds a certain amount, you must have business insurance to comply with Amazon's seller policy.
So let's dive in and tackle one of the least sexy but critical elements of your Amazon business.
Holding the correct insurance for your Amazon business will enable you to care for your customers and yourself should something unforeseen occur. Getting insured will also ensure you are compliant with Amazon's seller policy - a must for all sellers.
Here are a few scenarios in which the correct insurance for your Amazon business could offer you some protection:
Yikes! These are just a few situations which could leave you, your customers, or the service providers with whom you work in a compromised position.
Like many small business owners, you are probably focused on building a business doing what you love - sourcing low-cost goods to resell for profit, finding new products to bring to the market - there are many ways to turn a profit on Amazon.
For many, the Amazon platform has provided unrivalled opportunities to leverage a sophisticated online channel with a ready-made audience - creating a successful online business has never been easier.
However, just because it is easy to start selling online doesn't mean you should overlook the critical business practices all responsible retailers need to consider - insurance is one of them!
Caring for customers and providing them with products they love is the cornerstone of any successful business; it is also necessary to consider how your products might adversely affect consumers.
Regardless of how unpleasant or unlikely it seems, insurance is there to protect and care for you and your customers should something negative happen.
So, before you get carried away with building your business, you should probably take a minute to consider how your business activities might impact your customers - and we're not talking about positive Facebook reviews.
Yes - if you resell products purchased from manufacturers or suppliers, you are potentially liable for any negative consequences arising from use of the product.
All three - compensation from the manufacturer, the seller, or even Amazon, could be sought should the worst-case scenario occur.
Your Amazon business sits smack bang in the middle of the Amazon supply chain, and as such, you could also be considered liable.
Afterall, who's to say that your shipping and storage of goods hasn't adversely impacted their performance?
Like many Amazon sellers, your business might have started as a small venture from your spare room, but you must not lose sight of the real-world impact of your business activity.
You'll need to consider the risks posed to any person or organisation encountering your business; this might include:
In summary: If you are going to start selling on Amazon, you really should think about getting insured.
You must have insurance to comply with Amazon's policies once your account turnover exceeds a certain amount. The limit for sellers operating in the United Kingdom is currently £4k a month (correct as of May 2022).
Here is a quote taken from Amazon's policies regarding insurance:
"If the gross proceeds from sales of Your products processed through the Fulfilment by Amazon Service exceed the applicable Insurance Threshold during each month over any period of three (3) consecutive months, or otherwise if requested by us, then within thirty (30) days thereafter, you will maintain at your expense throughout the remainder of the Term public third party liability insurance in connection with each Amazon Site with at least the Insurance Limits per occurrence/aggregate covering liabilities caused by or occurring in conjunction with the operation of your business in connection with such Amazon Site, including products liability and bodily injury, with policy (ies) naming Amazon and its assignees as additional insureds. At our request, you will provide to us certificates of insurance evidencing the coverage require."
www.amazon.co.uk, Amazon Services Europe Business Solutions Agreement
Regardless of your account type, if your turnover has yet to exceed the applicable insurance threshold, insurance is not outlined as a requirement according to the Amazon policy.
That's not to say that individual sellers can't operate without insurance, but the question is - why would you want to?
No. You can purchase insurance for your Amazon business as a sole trader.
Yes. Sole traders can buy and sell on Amazon with an insurance policy for sole traders.
So what happens if you're already the proud owner of a professional selling account and you've overlooked the importance of insurance?
If you are reaching or have exceeded the turnover limit outlined in the Amazon policy, you'll need to get yourself insured as soon as possible.
But don't worry - you can purchase insurance online and get your business covered in a jiffy!
To learn more about the applicable insurance thresholds and general Amazon policies, head to the Amazon Services Europe Business Solutions Agreement on the Amazon website.
Getting insured is surprisingly simple. Be sure to research several insurers and discuss your Amazon business in detail with them.
A quick Google search should reveal a list of companies that offer insurance to Amazon sellers. Many companies will be willing to help you, and buying insurance doesn't take very long or cost very much!
One company you might want to consider calling is PolicyBee. They offer insurance specifically for Amazon business owners.
They even have a blog on Amazon seller's insurance - a must-read if you are ready to consider insuring your Amazon business.
Ps. Get £20 if you follow this link and buy Amazon seller insurance from PolicyBee.
So what have you got to lose? Hopefully, nothing - as long as you're insured!