Selling on Amazon is one of the most profitable ways to build an online business today. With millions of customers worldwide, the platform offers massive growth opportunities—but it also comes with strict rules and responsibilities. One of the most important (and often misunderstood) requirements is seller insurance.
If you’re planning to sell on Amazon or already running a store, understanding insurance requirements is critical. Failing to comply can result in account suspension, loss of sales, or even legal trouble. In this detailed 2026 guide, we’ll break down everything you need to know about Amazon seller insurance requirements, including when it’s mandatory, what coverage you need, costs, and how to stay compliant.
What Is Amazon Seller Insurance?
Amazon seller insurance is a type of business liability insurance that protects sellers from risks associated with selling products on the platform. It mainly covers situations where a product causes harm to a customer or damages property.
Amazon requires this insurance to reduce its own liability and ensure that sellers can handle claims financially. (Swanseaairport)
Is Insurance Mandatory for Amazon Sellers?
The short answer: It depends on your sales volume.
When Insurance Is Required
Amazon requires you to obtain insurance if:
- Your monthly sales exceed $10,000 in gross revenue, or
- You are specifically asked by Amazon to provide proof of insurance
Once you cross this threshold, you must secure insurance within a limited timeframe (usually 30 days). (Jungle Scout)
Important Note
Even if you haven’t reached $10,000/month, it is still highly recommended to have insurance because you are legally responsible for any product-related issues.
Why Amazon Requires Seller Insurance
Amazon’s requirement is primarily about risk management.
When a customer files a claim due to:
- Product defects
- Injuries caused by a product
- Property damage
The liability can involve:
- The seller
- The manufacturer
- Amazon itself
To avoid paying these claims directly, Amazon shifts responsibility to sellers by requiring insurance coverage. (Swanseaairport)
Minimum Amazon Seller Insurance Requirements (2026)
To comply with Amazon’s policies, your insurance policy must meet specific criteria:
1. Coverage Amount
- Minimum $1 million per occurrence
- Minimum $1 million aggregate coverage
This applies to all claims related to your products and business operations. (Jungle Scout)
2. Type of Insurance
Amazon accepts:
- Commercial General Liability (CGL) insurance
- Umbrella liability insurance
- Excess liability insurance
These policies must cover:
- Product liability
- Bodily injury
- Property damage
- Personal and advertising injury
3. Additional Insured Requirement
This is one of the most critical rules.
Your policy must list:
“Amazon.com Services LLC and its affiliates and assignees”
as an additional insured party.
Failure to include this exact wording can lead to rejection of your insurance certificate.
4. Insurance Provider Requirements
Your insurer must:
- Have a strong financial rating (A- or better)
- Offer global claims coverage
- Provide at least 30 days’ notice before policy cancellation
5. Deductible Limits
- Maximum deductible: $10,000
This ensures that sellers can realistically pay their portion of a claim.
6. Policy Validity
Your insurance policy must:
- Be active and valid
- Cover all listed products
- Match your legal business name
What Does Amazon Seller Insurance Cover?
A standard policy includes several types of protection:
1. Product Liability Insurance
This is the most important coverage.
Covers:
- Injuries caused by your product
- Product defects
- Malfunctions
2. Bodily Injury Coverage
If a customer is physically harmed while using your product, this coverage handles medical costs and legal claims.
3. Property Damage Coverage
If your product damages someone’s property, insurance covers repair or replacement costs.
4. Personal and Advertising Injury
Covers claims related to:
- Defamation
- Copyright infringement
- Misleading advertising
High-Risk Product Categories
Some product categories are more likely to trigger insurance claims:
- Electronics and batteries
- Beauty and skincare products
- Food and supplements
- Toys and children’s products
- Fitness equipment
These categories may require higher coverage limits or stricter compliance checks. (Swanseaairport)
What Happens If You Don’t Have Insurance?
Failing to meet Amazon’s insurance requirements can lead to serious consequences:
1. Account Suspension
Amazon may suspend your seller account until you provide valid insurance.
2. Listing Removal
Your product listings may be removed from the platform.
3. Financial Liability
You may be personally responsible for damages, legal fees, and settlements.
4. Payment Holds
Amazon can hold your funds if compliance issues arise.
Types of Insurance Amazon Sellers Should Consider
While Amazon only requires liability insurance, smart sellers often add extra coverage:
1. Product Liability Insurance
Mandatory for compliance.
2. General Liability Insurance
Covers broader business risks.
3. Business Owner’s Policy (BOP)
Bundles liability and property insurance.
4. Cyber Liability Insurance
Useful for sellers handling customer data.
5. Inventory Insurance
Protects stock stored in warehouses or fulfillment centers.
How Much Does Amazon Seller Insurance Cost?
The cost varies based on your business size and product type.
Average Cost Estimates (2026):
- Small sellers: $300–$800 per year
- Medium sellers: $800–$2,000 per year
- High-risk categories: $2,000+ per year
Factors affecting cost:
- Product type
- Sales volume
- Claims history
- Coverage limits
How to Get Amazon Seller Insurance
Getting insured is a straightforward process:
Step 1: Choose an Insurance Provider
Select a provider that meets Amazon’s requirements.
Step 2: Request a Quote
Provide details about your business and products.
Step 3: Customize Coverage
Ensure your policy includes product liability and meets Amazon standards.
Step 4: Add Amazon as Additional Insured
This is mandatory for approval.
Step 5: Upload Certificate of Insurance
Submit your COI through your Amazon Seller Central account.
Common Mistakes Sellers Make
Avoid these common errors:
1. Not Adding Amazon as Additional Insured
This is the most frequent reason for rejection.
2. Buying the Wrong Policy Type
Not all general liability policies include product liability.
3. Ignoring Coverage Limits
Policies below $1 million will not be accepted.
4. Delaying Compliance
Late submission can lead to account issues.
Real Seller Insights (From Community Discussions)
Many sellers on forums highlight practical challenges with compliance:
“You just need liability insurance… add Amazon as additional insured.” (Reddit)
Some sellers also report delays or confusion when submitting insurance documents, emphasizing the importance of accuracy.
Benefits of Having Amazon Seller Insurance
Beyond compliance, insurance offers several advantages:
1. Financial Protection
Covers lawsuits, claims, and damages.
2. Business Credibility
Builds trust with customers and partners.
3. Risk Management
Protects your business from unexpected events.
4. Long-Term Growth
Allows you to scale without fear of liabilities.
Tips to Stay Compliant in 2026
- Monitor your monthly sales closely
- Get insured before reaching $10,000/month
- Keep your policy updated
- Double-check your certificate of insurance
- Work with experienced insurance providers
Final Thoughts
Amazon seller insurance is not just a requirement—it’s a crucial part of running a sustainable e-commerce business. As your sales grow, so do your risks, and having the right coverage ensures that one unexpected incident doesn’t destroy your business.
By understanding Amazon’s insurance requirements and staying compliant, you can protect your brand, maintain your seller account, and focus on scaling your business confidently.
In today’s competitive e-commerce environment, success isn’t just about selling products—it’s about managing risks effectively. And Amazon seller insurance is a key pillar of that strategy.