Amazon Seller Insurance Requirements: What You Need to Know in 2025

Selling on Amazon can be a lucrative business opportunity, but it comes with specific insurance requirements that many sellers overlook until it's too late. Whether you're a new seller or an established business, understanding Amazon's insurance requirements is crucial for protecting your business and maintaining your selling privileges on the platform.

Understanding Amazon's Insurance Requirements

Amazon has implemented strict insurance requirements to protect both sellers and customers from potential liabilities. These requirements have evolved significantly over the years, and 2025 brings new considerations that every seller must understand.

When Does Amazon Require Insurance?

Amazon's insurance requirements typically kick in when your business reaches certain thresholds or sells specific product categories. Generally, you'll need commercial general liability insurance when:

• Your monthly sales exceed $10,000 on Amazon

• You sell products in high-risk categories

• Amazon specifically requests proof of insurance

• You manufacture or private label your own products

• You sell products that could cause bodily injury or property damage

It's important to note that Amazon can request proof of insurance at any time, regardless of your sales volume. Having the right coverage in place before you receive a request can prevent disruptions to your business.

Required Coverage Amounts

Amazon's standard insurance requirements for sellers include commercial general liability insurance with minimum coverage of:

• $1 million per occurrence

• $1 million aggregate

For sellers with higher sales volumes or those in high-risk categories, Amazon may require:

• $2 million aggregate coverage

• Additional umbrella policies for extra protection

These coverage amounts are designed to protect against claims of bodily injury, property damage, and personal injury that may arise from your products or business operations.

Types of Insurance Amazon Sellers Need

Commercial General Liability Insurance

This is the primary insurance requirement for Amazon sellers. Commercial general liability (CGL) insurance protects your business against claims of:

• Bodily injury caused by your products

• Property damage resulting from your products

• Personal and advertising injury

• Medical payments for injuries on your business premises

Your CGL policy must specifically name Amazon as an additional insured party. This is a non-negotiable requirement that Amazon enforces strictly.

Product Liability Insurance

Product liability insurance is often included within your CGL policy, but it's worth understanding separately. This coverage protects you if a product you sell causes:

• Physical injury to a customer

• Damage to a customer's property

• Illness or allergic reactions

• Injuries from defective products or inadequate warnings

Product liability is particularly important for sellers who manufacture their own products, private label items, or sell in categories like electronics, toys, beauty products, or food and beverages.

Professional Liability Insurance

While not typically required by Amazon, professional liability insurance (also called errors and omissions insurance) can be valuable for sellers who provide advice, consulting, or services alongside their products. This coverage protects against claims of:

• Negligent advice or recommendations

• Errors in product descriptions or specifications

• Failure to deliver promised services

• Misrepresentation of product capabilities

Cyber Liability Insurance

In 2025, cyber threats are more prevalent than ever. While Amazon doesn't explicitly require cyber liability insurance, it's becoming increasingly important for sellers who:

• Store customer data

• Process payments outside Amazon's platform

• Maintain their own e-commerce websites

• Handle sensitive business information

Cyber liability insurance covers costs associated with data breaches, including notification expenses, credit monitoring for affected customers, legal fees, and regulatory fines.

High-Risk Product Categories

Certain product categories carry higher liability risks and may trigger Amazon's insurance requirements sooner or require higher coverage amounts. These include:

Electronics and Electrical Products

Products with batteries, heating elements, or electrical components pose fire and shock hazards. Sellers in this category should ensure their insurance covers product recalls and equipment failure.

Beauty and Personal Care

Cosmetics, skincare products, and supplements can cause allergic reactions or adverse health effects. Insurance should cover claims related to ingredient sensitivities and product contamination.

Toys and Children's Products

Products for children are subject to strict safety regulations. Insurance must cover choking hazards, toxic materials, and age-inappropriate design claims.

Food and Beverages

Food sellers face risks from contamination, allergens, and foodborne illness. Your insurance should specifically cover food product liability.

Health and Wellness Products

Supplements, fitness equipment, and health devices carry significant liability exposure. Ensure your coverage addresses health claims and product efficacy disputes.

Automotive Parts and Accessories

Products that affect vehicle safety require comprehensive coverage for potential accidents or equipment failure.

Additional Insured Requirements

One of the most critical aspects of Amazon seller insurance is the additional insured requirement. Your insurance policy must specifically name:

• Amazon.com Services LLC

• Amazon.com, Inc.

• Any Amazon affiliates and subsidiaries

The additional insured endorsement means that Amazon is protected under your policy if they're named in a lawsuit related to your products. This is a mandatory requirement, and your certificate of insurance must clearly show Amazon as an additional insured party.

How to Obtain the Right Insurance

Working with Insurance Providers

Not all insurance companies understand the unique needs of Amazon sellers. When shopping for insurance:

1. Seek specialized providers: Look for insurers who specifically work with e-commerce businesses and understand Amazon's requirements

2. Verify Amazon compliance: Ensure the policy meets all of Amazon's specific requirements, including additional insured status

3. Compare coverage options: Don't just compare prices; evaluate coverage limits, exclusions, and deductibles

4. Review policy language: Confirm that the policy covers online sales and products sold through third-party platforms

Cost Considerations

The cost of insurance for Amazon sellers varies based on:

• Annual revenue and sales volume

• Product categories and risk levels

• Claims history

• Coverage limits and deductibles

• Business location

Generally, sellers can expect to pay between £400 and £2,000 annually for basic coverage, with costs increasing for higher-risk categories or larger businesses.

Submitting Proof of Insurance to Amazon

When Amazon requests proof of insurance, you'll need to provide a certificate of insurance (COI) that includes:

• Your business name and contact information

• Policy number and effective dates

• Coverage amounts meeting Amazon's minimums

• Amazon listed as additional insured

• Insurance company's contact information

You can submit your COI through Seller Central:

1. Navigate to Settings > Account Info

2. Select "Insurance Information"

3. Upload your certificate of insurance

4. Wait for Amazon to review and approve

Amazon typically reviews insurance submissions within 24-48 hours, but it can take longer during peak periods.

Consequences of Non-Compliance

Failing to maintain adequate insurance or provide proof when requested can result in:

• Account suspension: Amazon may suspend your selling privileges until you provide compliant insurance

• Loss of revenue: Suspended accounts cannot process orders or receive payments

• Permanent deactivation: Repeated non-compliance may result in permanent account closure

• Personal liability: Without insurance, you're personally responsible for any claims or lawsuits

Best Practices for Amazon Sellers

Maintain Continuous Coverage

Don't let your insurance lapse, even during slow sales periods. Gaps in coverage can:

• Leave you vulnerable to claims from previously sold products

• Violate Amazon's terms of service

• Make it difficult to obtain future coverage

Keep Amazon Updated

Whenever you renew or change your insurance policy:

• Upload the new certificate of insurance to Seller Central

• Ensure Amazon remains listed as additional insured

• Verify that coverage amounts still meet requirements

Document Everything

Maintain detailed records of:

• All insurance policies and certificates

• Communication with insurance providers

• Submissions to Amazon

• Product safety testing and certifications

Review Coverage Annually

As your business grows and evolves:

• Reassess your coverage needs

• Consider increasing coverage limits

• Add coverage for new product categories

• Evaluate additional insurance types

Beyond Amazon's Requirements

While meeting Amazon's minimum requirements is essential, consider additional coverage that protects your business more comprehensively:

Business Property Insurance

Protects your inventory, equipment, and business property from theft, fire, or natural disasters.

Business Interruption Insurance

Covers lost income if your business operations are disrupted by covered events.

Workers Compensation

Required if you have employees, covering medical costs and lost wages for work-related injuries.

Umbrella Insurance

Provides additional liability coverage beyond your primary policy limits, offering an extra layer of protection.

Staying Compliant in 2025

Amazon's insurance requirements continue to evolve as the e-commerce landscape changes. Stay informed by:

• Regularly reviewing Amazon's seller policies

• Joining seller forums and communities

• Working with insurance providers who specialize in e-commerce

• Consulting with legal and insurance professionals

Conclusion

Insurance requirements may seem like an additional burden for Amazon sellers, but they're essential for protecting your business and ensuring long-term success on the platform. By understanding what coverage you need, maintaining compliant policies, and proactively managing your insurance, you can focus on growing your business without worrying about potential liabilities.

Don't wait until Amazon requests proof of insurance to get covered. Being proactive about insurance not only keeps you compliant with Amazon's requirements but also protects your personal assets and business investment. In 2025's competitive e-commerce environment, proper insurance coverage isn't just a requirement—it's a smart business decision that provides peace of mind and financial protection.

Whether you're just starting out or running an established Amazon business, take the time to review your insurance needs today. The cost of proper coverage is minimal compared to the potential financial devastation of an uninsured claim or the loss of your Amazon selling privileges.