INSURANCE GUIDE
Amazon Seller Insurance UK
What UK Amazon marketplace sellers need to know about commercial liability, product liability, and Amazon's insurance requirements.
TL;DR
- Amazon requires sellers generating over $10,000 gross proceeds per month to hold commercial liability insurance naming Amazon as an additional insured.
- Product liability insurance covers claims that a product you sold caused injury or property damage - essential for all sellers of physical goods.
- Public liability covers third-party incidents connected to your business operations outside the product itself.
- Stock cover is separate and protects goods held in your own premises or in Amazon FBA warehouses.
Amazon's Insurance Requirements for Sellers
Amazon's seller policy requires that sellers who generate gross proceeds above $10,000 in any month hold commercial general liability (CGL) insurance. The policy must name Amazon and its assignees as additional insureds. Amazon can request a certificate of insurance (COI) at any time; failure to provide one within the required timeframe can result in account suspension.
The minimum cover amount required by Amazon is typically $1m per occurrence and $2m aggregate, though Amazon updates its requirements and sellers should verify the current requirements in their Seller Central account. Amazon also makes Seller Protection available through its own programme, but this does not substitute for independent liability insurance.
Product Liability Insurance for Amazon Sellers
Product liability insurance covers claims that a product you sold caused personal injury or property damage to a buyer or third party. As a retailer - even if you did not manufacture the product - you can be held liable under the Consumer Protection Act 1987 as a supplier. If you import products from outside the UK and EU, you may be classified as the producer for the purposes of UK product liability law, increasing your exposure.
Product liability is typically included within a commercial general liability or public liability policy. Verify that the policy schedule explicitly includes product liability cover before assuming it is included.
FBA Stock and Inventory Cover
Amazon's FBA (Fulfilled by Amazon) programme stores your inventory in Amazon's warehouses. Amazon's FBA Lost and Damaged Inventory Reimbursement programme provides limited protection for stock lost or damaged while in Amazon's fulfilment network, but this is not insurance - it is a commercial remedy subject to Amazon's own policies. Sellers with significant stock values should consider stock insurance that explicitly covers goods held in third-party warehouses.
Cyber Insurance for Online Sellers
UK sellers processing customer data through their own website or store systems face data protection obligations under UK GDPR. A data breach - whether through an attack on your own systems or a compromise of a third-party system you use - can trigger ICO notification requirements and potentially regulatory action. Cyber insurance covers incident response costs, ICO notification, and business interruption from cyber events.
Other Marketplace Requirements
Amazon is not the only marketplace that requires seller insurance. eBay's seller protections do not substitute for independent insurance. Etsy's terms and conditions do not mandate insurance but recommend it. Sellers operating across multiple marketplaces should ensure that their policy covers all sales channels and all markets in which they sell.
Related Guides
Disclaimer
This guide is for general information only and does not constitute financial or insurance advice. Kaeltripton.com is not regulated by the FCA. Always read policy documents in full before purchasing cover. Amazon's seller requirements change periodically; always verify current requirements in your Seller Central account.
Sources
Frequently Asked Questions
Does Amazon provide insurance for its sellers?
Amazon offers a Seller Protection programme that provides some limited cover for certain types of claim made against sellers, but this is not a substitute for independent commercial liability insurance. Amazon's own programme has conditions and limits that may not cover all claim types. Amazon separately requires qualifying sellers to hold their own commercial general liability insurance naming Amazon as an additional insured.
What is the Amazon seller insurance minimum requirement?
Amazon typically requires a minimum of $1m per occurrence and $2m aggregate for commercial general liability insurance, with Amazon named as an additional insured. Requirements can change; sellers should verify the current minimums in their Seller Central account. Certificates of insurance must be from an insurer with a minimum AM Best or equivalent financial strength rating.
Do small Amazon sellers need insurance?
Amazon's mandatory insurance requirement applies to sellers generating over $10,000 per month. However, all sellers of physical goods face product liability exposure regardless of turnover - a buyer injured by a product you sold can bring a claim whether you are a large or small seller. Product liability insurance is prudent for any seller of physical goods, regardless of whether Amazon's threshold has been reached.
Does Amazon seller insurance cover FBA inventory loss?
Standard commercial liability policies cover third-party claims - they do not cover your own stock losses. FBA inventory loss is a stock insurance risk, not a liability risk. Sellers with significant FBA inventory should obtain separate stock or goods-in-storage insurance that explicitly covers third-party warehouse locations.
