Becoming an Amazon seller is a great business opportunity, allowing you to build a consistent and profitable income stream without the hassle of a traditional business model. However, even Amazon sellers without a physical store must get liability insurance and protect their business from unexpected financial losses. Here’s everything you need to know about getting your Amazon seller insurance.
The Amazon business industry, or the Amazon seller industry, is the ecosystem of businesses and third-party sellers that sell their products on the Amazon platform. The seller industry is a huge contributor to Amazon’s revenue and is a profitable source of business for all the sellers engaged in it. It’s a win-win for both parties.
As of early 2025, there are approximately 1.9 million active sellers on Amazon worldwide, with a significant number of new sellers joining every day. These third-party sellers are a vital part of the marketplace, accounting for over 60% of all units sold on the platform.
Despite rising costs, a large majority of sellers find success. According to various reports from 2024 and 2025, around 86-89% of Amazon sellers are profitable, with most becoming so within their first year. This profitability is largely driven by Amazon’s massive customer base, which includes over 310 million active users worldwide and over 250 million global Prime members. This high demand continues to encourage entrepreneurs to become Amazon sellers and join this lucrative industry.
Why is Insurance for an Amazon Business Important?
If you sell on Amazon and you’re thinking of skipping Amazon insurance, you might be putting yourself in a risky situation. Here’s why.
Liability Protection
Like all commercial businesses, Amazon sellers risk liability claims resulting from defective products, personal injury, or accidents. You have to be particularly vary of product liability risks, as even a small quality issue in a product or business equipment can result in hefty claims.
A comprehensive coverage policy that includes product liability insurance and commercial liability insurance can help cover the costs arising from these claims, such as medical expenses, legal fees, and product recalls.
Financial Security
Amazon sellers often face legal issues and disputes that can rack up quite a lot of money in terms of legal expenses and settlement costs. Insurance, particularly general liability insurance, helps cover these legal costs and offers financial security to businesses that otherwise can’t afford huge sums of money.
Amazon Requirements
Amazon requires pro merchants or sellers with high gross sales or revenue to have specific insurance coverage policies. These can include general liability coverage or commercial umbrella liability insurance with at least a coverage of $1 million per occurrence. You can continue selling on Amazon without worrying about getting shut down or penalized by meeting these insurance requirements.
Cybersecurity
Online sellers on the Amazon website store sensitive customer information, which can be a valuable target for hackers or cyber criminals. Without adequate insurance, you’re vulnerable to cyber threats and data breaches that can cause significant financial losses and damage your business reputation. Having cyber liability insurance, in this case, is a wise decision to stay on the safer side
Amazon Business Insurance Coverage & Policies
These coverages form the foundation of any risk management program for an Amazon business:
This coverage protects against third-party claims of bodily injury, associated medical costs, and damage to someone else’s property. As an Amazon seller, you might be dealing with suppliers, customers, or even third-party service providers, making it crucial to have coverage against potential claims arising from unintended harm or property damage.
This insurance covers businesses against data breaches and other cyber threats, ensuring protection from costs related to recovery, notifications, and potential legal claims. With digital transactions, personal customer data handling, and online communications, Amazon businesses are vulnerable to cyber threats, making this coverage essential.
This insurance provides wage replacement and medical benefits to employees injured during the course of employment. If your Amazon business has employees involved in warehousing, packaging, or any physical activity, they are at risk of on-the-job injuries. This coverage ensures their protection and the company’s compliance with legal requirements.
This coverage protects against claims from employees that their legal rights as employees of the company have been violated. As businesses grow and hire staff, they can face claims of wrongful termination, discrimination, or other employment-related issues. This coverage ensures financial protection against such claims.
Product liability insurance covers the business against claims of injuries or damages caused by products they’ve sold or produced. Amazon sellers distribute products that could potentially malfunction or cause harm. This insurance protects against claims arising from such incidents.
This coverage protects against damage to or loss of physical assets due to hazards like fire, theft, or natural disasters. Whether it’s a home office or a warehouse filled with inventory, any physical space or equipment crucial to the business needs protection against unforeseen damages.
This insurance covers goods in transit, protecting against potential loss or damage while products are being transported from one place to another. Amazon sellers often rely on shipping their products, either to Amazon fulfillment centers or directly to customers. This coverage ensures that goods in transit are protected against potential losses or damages.
The costs of your Amazon seller insurance will vary depending on your product category, the estimated annual revenue or gross sales of your business, your deductible amount, insurance coverage, and even your insurance company.
The insurance costs for Amazon sellers can be anywhere from a hundred dollars to over several thousand dollars, depending on their risk profiles. For example, if you have a small business that sells a low-risk product, you will have lower insurance costs than a more extensive operation.
Amazon Business Claims & Examples
Navigating a commercial insurance claim is often challenging, often fraught with confusion and multiple unknown factors. The following four-part series outlines the ins and outs of commercial insurance claims:
Amazon Business Insurance Frequently Asked Questions (FAQ)
While Amazon itself does not universally mandate insurance for all sellers, they do require sellers with a certain volume (typically exceeding $10,000 in transactions within any given month) to have Commercial General Liability insurance. However, even if it’s not mandated, insurance is always a good idea to protect your business from potential risks.
The amount of Amazon sellers insurance you need will depend on various factors, including the nature and volume of your products, the size of your business, and where you operate. It’s best to consult with an insurance agent who can assess your specific needs and provide tailored advice.
To get Amazon seller insurance, you should reach out to local insurance companies and brokers. Many providers offer insurance policies tailored for e-commerce and Amazon sellers, ensuring you get the right insurance coverage matching your business model.
Amazon Business Insurance Insights
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Finding Amazon business insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined and intuitive as possible.
1
Get a quote
Use our custom-built digital platform to get quotes fast. We automate clerical tasks that plague traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.
2
Pair with a specialist
No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.
3
Stay one step ahead
To do better, you need to know better. With changing political, technological, legal, and economic landscapes, staying ahead of the curve is critical.
Our in-house team is tapped into the latest developments in your industry, proactively ensuring you’re covered.
Schedule Time with an Amazon Business Expert
Risk Calibration
Let’s figure out if you’re under- or over-insured and whether your current policies have detrimental gaps.
Identify Cost Savings
We’ll compare your current policies with our extensive benchmarking database to see if your risk and costs have kept pace.
Risk Calibration
Walk away with a detailed plan to manage risk as your company scales — no strings attached.
Why Choose Founder Shield?
Founder Shield is a leading insurance provider that specializes in offering comprehensive coverage for Amazon businesses, offering numerous benefits and advantages over traditional insurance providers. Here’s a breakdown of some of the key features and benefits that you’ll enjoy with us:
Benefits of Choosing Founder Shield
Industry Expertise
Founder Shield is focused on protecting rapidly evolving Amazon startups. We ensure that our products are tailored to meet the unique needs of Amazon sellers.
Customized Solutions
Founder Shield offers bespoke insurance policies that are designed specifically for each client’s needs, ensuring comprehensive coverage that addresses the unique risks associated with Amazon operations.
Fast Quotes
With Founder Shield’s streamlined quoting process, you can receive a personalized quote for your Amazon business insurance quickly, allowing you to make informed decisions fast.
Ease of Use
Founder Shield’s user-friendly digital platform makes it easy to manage your insurance policies, submit claims, and access important documents whenever you need them.
Dedicated Support
Founder Shield provides exceptional customer service, with dedicated account managers who are always available to assist you with any questions or concerns you may have about your insurance coverage.
Scalable Coverage
As your business grows, Founder Shield’s insurance policies can grow with you, ensuring you always have the right level of coverage for your changing needs.
Founder Shield is a preferred choice for Amazon businesses because of our specialization in the industry. We offer flexible and customized insurance policies, a speedy quoting process, and exceptional customer service with dedicated account managers.
Great service – proactive, responsive, go beyond what I have expected from previous providers. The team do a wonderful job
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