If you sell on Amazon, you’re running a real business with real risk no matter how “online” it feels. One defective plug, one mislabeled supplement, one toddler’s toy with a sharp edge, and suddenly you’re dealing with a claim you never imagined. That’s why Amazon requires liability insurance for many sellers and strongly encourages it for everyone else. The good news: getting covered is simpler (and usually cheaper) than you think if you know what to buy and how to stay compliant.

This 2025 guide breaks down everything an Amazon FBA/FBM seller needs to know about insurance: who needs it, the exact policy requirements, what coverage types to consider, how much it costs, where to get it (including Amazon’s Insurance Accelerator), how to upload proof, and practical tips to keep premiums low while protecting your brand.

Why Amazon Sellers Need Insurance

Two reasons:

1. Contractual compliance. Under Amazon’s Services Business Solutions Agreement, when your gross sales exceed a set threshold during a single month (historically $10,000 in gross proceeds) or if Amazon otherwise requests it, you must carry business liability insurance and provide a valid certificate within a short window (commonly 30 days). Not doing so risks listing suppression or account suspension.

2. Risk transfer. Even careful sellers get blindsided by accidents: allergic reactions, property damage from electronics, product misuse, counterfeit returns that injure a customer, you name it. A single legal demand letter can cost more than years of premiums. Insurance shifts that risk from you to a carrier that’s built to handle defense costs, settlements, and claims administration.

Quick reality check: Amazon is not your insurer. Amazon’s customer-first posture means claims will be addressed one way or another but if you’re not properly insured and compliant, you (and your margins) can be the one left paying.

Amazon’s Core Insurance Requirements (What to Have on Your Policy)

While phrasing may vary slightly by marketplace and year, the core compliance items have been consistent. Sellers that meet the trigger (or are otherwise asked to provide coverage) are expected to maintain a policy that:

• Minimum limits: At least $1,000,000 USD per occurrence and $1,000,000 aggregate (often specified for products/completed operations, bodily injury, and property damage).

• Policy form: Commercial General Liability (CGL) written on an occurrence basis. You can satisfy limits with a combination of CGL + Umbrella or CGL + Excess Liability.

• Additional insured: Must include “Amazon.com Services LLC and its affiliates and assignees” as additional insureds (as their interests may appear).

• Insurer financial strength: Typically AM Best A- or S&P A- (or local equivalent) and global claims handling capability.

• Cancellation notice: The carrier should agree to notify Amazon 30 days before cancellation, nonrenewal, or material change.

• Deductible: Not greater than $10,000 and listed on the certificate.

• Named insured: Must exactly match the legal entity on your Seller Central account.

• Territory: Must cover all products you list on the Amazon site(s) where you sell.

• Valid dates: Policy must be active and valid for at least 60 days at time of submission.

Tip: Ask your agent to include the precise additional insured wording Amazon requests and add Amazon’s mailing address provided in Seller Central. This avoids back-and-forth rejections when you upload your Certificate of Insurance (COI).

What Each Coverage Type Actually Protects

1) Commercial General Liability (CGL)

The backbone of Amazon seller coverage. It typically includes:

• Products & Completed Operations: Injuries or property damage allegedly caused by your product after it’s out in the world.

• Bodily Injury/Property Damage: Someone gets hurt or third-party property is damaged.

• Personal & Advertising Injury: Offenses like libel/slander or certain advertising missteps (varies by policy).

Use case: A blender blade detaches and injures a customer; a heated mug damages a countertop; a stroller wheel fails causing a fall. Defense and settlement costs are what CGL is made for.

2) Umbrella Liability

An Umbrella policy increases the limit above your primary CGL (and, optionally, auto or employer’s liability). It can also fill some gaps, depending on the form.

Use case: Your CGL pays out to its $1M limit on a big loss; the Umbrella picks up the next layer (e.g., another $1M–$5M) up to its limit.

3) Excess Liability

Also increases your limits above a specified underlying policy, but is follow-form over that policy alone. Unlike an umbrella, excess doesn’t usually broaden terms just adds limit.

Use case: You only want extra protection above your CGL (not multiple underlying policies).4) Optional add-ons worth considering

• Product Recall Expense: Covers certain costs to communicate, ship, dispose, and replace recalled items.

• Cyber Liability: If you also sell DTC or store customer data, cyber incidents and PCI exposures matter.

• Transit/Stock Insurance (Inland Marine): Protects inventory in transit or at 3PLs.

• Workers’ Compensation: Required if you have employees (varies by state/country).

• Commercial Auto: If you operate vehicles for the business.

Bottom line: For Amazon compliance, start with CGL (occurrence form, $1M limits). Add Umbrella/Excess if you sell higher-risk products or want more protection.

Do You Need an LLC Before You Buy Insurance?

Not required to sell on Amazon or to buy insurance—but recommended as you scale. An LLC or corporation can help separate personal and business assets in lawsuits. Insurance + an LLC is a strong one-two punch. (This is general information, not legal or tax advice talk to your attorney/CPA.)

How Much Does Amazon Seller Insurance Cost in 2025?

Premiums vary, but here’s a realistic range we see for small-to-mid sellers:

• Entry-level sellers: ~$300–$700/year (lightweight products, lower annual revenue).

• Growing brands: ~$500–$1,500/year (moderate risk categories, mid-six-figure revenue).

• Higher-risk categories or higher revenue: $1,500–$5,000+ per year.

What affects the price?

• Product risk profile: Kids’ items, ingestibles, electronics, sharp/heat/pressure products = higher risk.

• Revenue: More sales = more exposure = higher premium.

• Loss history: Prior claims can raise rates.

• Limits & add-ons: Umbrella, recall, cyber, etc., add cost.

• Packaging & warnings: Clear instructions and compliant labeling can help.

Pay-As-You-Sell (Monthly) Options

Some providers now sync to your marketplace sales and charge a monthly, usage-based premium. Benefits:

• Better cash flow for seasonal sellers.

• Avoids under/over-insuring when sales swing.

If your revenue fluctuates (Prime Day spikes, Q4 surges), usage-based billing can be more accurate than an annual estimate.

Where to Buy: Providers & Amazon’s Insurance Accelerator

1) Amazon Insurance Accelerator

Amazon partners with brokers/carriers who understand the marketplace requirements and can quickly issue compliant certificates. You’ll find recommended providers inside Seller Central under Account Health → Insurance (wording/placement can vary by marketplace). Expect fast quoting and pre-built additional insured language.

2) E-commerce-Savvy Insurers & Brokers

Look for providers that:

• Know Amazon’s COI requirements cold.

• Can add multiple marketplaces (US, CA, EU) to one policy if needed.

• Offer global claims handling and A-/A ratings.

• Provide pay-as-you-sell options, monthly billing, or low minimum premiums.

Examples to search for include specialty e-commerce brokers/insurtechs plus mainstream carriers that actively write product liability for online merchants. (We’re platform-agnostic here—choose the best fit for your risk, budget, and geography.)

Tip: If you sell in multiple countries, ask for a global or multinational solution so you’re not juggling separate policies with conflicting terms.

How to Upload Your Certificate of Insurance (COI) to Amazon

1. Buy the policy that meets Amazon’s criteria (CGL occurrence, $1M/$1M, correct AI wording, deductible ≤$10k, etc.).

2. Ask your insurer for a Certificate of Insurance with:

   • Your legal entity name exactly as in Seller Central.

   • Amazon listed as Additional Insured with its required wording and address.

   • Policy number, effective/expiration dates, limits, deductible.

3. In Seller Central, go to Settings → Account Info → Business Insurance (location label can vary), then Upload your COI.

4. Keep a PDF copy handy. If Amazon requests corrections, loop your agent in immediately.

Common COI rejection reasons

• Entity name mismatch (comma, LLC suffix, punctuation).

• Missing additional insured language.

• Deductible not shown or over $10,000.

• Claims-made policy instead of occurrence.

• Lapsed/expiring policy dates.

What About Claims Under $1,000?

Amazon has publicly stated that it may resolve and pay certain valid customer claims under $1,000 as a concession—provided the seller is compliant and holds valid insurance. That’s helpful for small issues, but it’s not a substitute for your policy. Anything more serious or if you’re non-compliant can land squarely on your desk.

International Sellers: Obtaining US-Compliant Coverage

Selling into the US from abroad? You still need coverage that meets Amazon’s US marketplace requirements. Practical steps:

• Work with a global broker or a US-licensed carrier that can insure foreign entities with US exposure.

• Ensure claims handling and jurisdiction are addressed (US claims, US courts).

• Confirm your legal entity in Seller Central matches your insured name on the policy.

• If you sell in the EU/UK/CA, ask for a solution that spans multiple regions to avoid gaps.

How to Keep Premiums Down (Without Cutting Coverage)

• Choose safer SKUs. Reduce high-risk categories if they’re not core to your brand.

• Quality control. Require factory QC reports, use compliant materials, and test batches.

• Packaging & instructions. Clear warnings, instruction manuals, age grading, and compliance marks (CPSIA, CE, RoHS, FCC, etc., as applicable).

• Incident logs. Document and address customer complaints systematically; show your carrier you manage risk.

• Right limits. Start with $1M occurrence/$1M aggregate to comply; add Umbrella as you scale or enter higher-risk categories.

• Monthly usage-based billing if your revenue fluctuates.

Practical Scenarios (What Coverage Responds?)

• Battery pack overheats and scorches a desk: CGL property damage + defense costs.

• Fitness band causes skin burns/rash: CGL bodily injury + defense costs.

• Dog toy tears; pet surgery is required: CGL bodily injury (vet bills could be claimed) + defense costs.

• Large claim that exceeds $1M limit: Umbrella/Excess layer responds above your CGL.

• Recall due to choking hazard: Product Recall Expense endorsement (if purchased) can help with logistics and communications (policy terms vary).

Step-By-Step: From “I Need Insurance” to “I’m Compliant”

1. Verify your trigger. If you’re nearing or exceeded Amazon’s monthly threshold or received a request, start immediately.

2. Gather facts. Product list, estimated 12-month revenue by category/region, prior claims (if any), sales channels.

3. Get quotes. Use the Insurance Accelerator or an e-commerce-savvy broker. Ask about occurrence CGL, optional Umbrella, and monthly/usage-based billing.

4. Bind coverage. Confirm limits, additional insured wording, and deductible compliance.

5. Collect the COI. Triple-check entity name, dates, limits, and Amazon AI language.

6. Upload to Seller Central. Save a copy in your compliance folder.

7. Calendar renewals. Set alerts 45–60 days before expiration so there’s no gap.

8. Update when you scale. New product lines or a jump in revenue? Tell your broker so you’re not under-insured.

Conclusion

Amazon seller insurance isn’t just a requirement it’s protection for your brand, profits, and future. By meeting Amazon’s rules and choosing the right coverage, you can focus on scaling your FBA business with peace of mind.