4 Things you Need to Know Before Getting your Amazon Store Insured

4 things you need to know before getting your amazon store insured Amazon

4 Things you Need to Know Before Getting your Amazon Store Insured

As an Amazon seller, you probably know the importance of compliance with all of Amazon’s requirements like getting your business insured. But if this is the first time you’re insuring your store, you may have some questions, like what insurance you need, and what factors determine the price of your insurance policy. You might also be wondering how to get Amazon insurance and where you can find a policy that is right for you at the best price. Getting insurance is the first step in fortifying your business so it’s important to get it right. 


Product liability insurance is a way for eCommerce stores to protect themselves from unexpected damage, harm, or mistakes. Once someone buys something from you, they become your customer, meaning that you are now accountable for any complaint, legal action, or compensation that the customer may demand. When selling on amazon, eCommerce retailers must be insured. However, insurance policies vary depending on some variables that are specific to your eCommerce store, such as the type of products you sell, and the volume of your sales.


There’s nothing more important to store owners than seeing their efforts translate into sales and success, and will do all they can to make that happen. But other than sales-oriented efforts, sellers can’t ignore the mounting bureaucratic tasks that need to be taken care of such as bookkeeping and insurance.  Unfortunately, many lack knowledge when it comes to insurance and most likely don’t know where to start. The whole topic of insurance can be overwhelming, time-consuming, and daunting to say the least. In this article, we will review the different factors at play that influence the process of getting your store insured, the things you should know before getting insurance, and tips on how to find the right insurance for your business. 

The Products you Sell Affect Your Insurance Policy

Simply put, there is a direct connection between the product you sell and the risk that something will go wrong. The insurance you need to cover damages claims potentially caused by your product is often will be sold as part of General liability insurance or Business Owner Policy. From an insurance perspective, the riskier your product, the higher the chances are that it will cause damage to one of your customers, and the more you will be paying for insurance. Damages caused to customers by your products can include:

  • bodily injury or harm
  • property damage

For example, If you are selling a product that the probability of injury is lower, for example, cotton bed sheets, you will be paying less for your policy than if you were selling an item that has a higher risk of damage, for example, knives. If you have decided to open an eCommerce store, but are not sure yet which product to sell, you might want to consider this. The amount you are paying for product liability insurance can greatly affect your overall expenses. Depending on the level of risk, the cost of your policy can be as low as $300 and as high as a few thousand dollars, which is something a new store owner should take into account in the early days of his business. 

Not all Insurance Brokers can get you the Best Policy

You may be surprised to find out that one of the main factors that determine the price of your liability insurance policy, is where you purchase it from. eCommerce businesses are unique in their nature. They are dynamic, versatile, and much less predictable than a regular brick-and-mortar store, and that’s why it’s important to buy insurance from a broker or provider who really understands what an eCommerce store is. As an eCommerce seller, you don’t need to purchase an insurance policy that includes coverage for things that aren’t relevant to your operation. Buying insurance from regular brokers who don’t understand what eCommerce businesses really are carries with it the risk of significantly overpaying for your policy. On the flip side, buying liability insurance for your store from someone who knows and understands eCommerce, means getting a policy that is priced right and well-suited to your needs. With Spott, you can rest assured knowing that Spott’s experts know all of Amazon’s requirements, and purchasing insurance through them means purchasing a policy that is tailored to your store.

Your Insurance Policy Should be Suited to Your Store 

Many platforms have insurance requirements, and depending on which platform you chose to set up shop, your policy will need to be determined accordingly. Amazon’s insurance requirements include specifications regarding:

  • Policy limit – Has to be up to $1 million
  • Product list – Your policy needs to include all products being sold in your store
  • Entity name and details – Your entity name must match the name listed on Amazon
  • Amazon as an insured party – Amazon must be listed in the policy as an additional insured

And the list goes on. If your business is already insured, your existing policy might not meet these requirements and you or your broker will need to make adjustments for it to be approved. For uninsured businesses, only some insurance providers have the knowledge or ability to create an insurance policy based on these specific requirements.

It is for this reason that you should refer back to the previous point. Buying your insurance policy from an eCommerce native platform like Spott ensures that your policy will be 100% compatible with Amazon’s requirements. As eCommerce insurance experts, Spott makes it their job to stay updated with the ever-changing insurance requirements of Amazon and other platforms.

If you Sell on More Than one Marketplace, you Still Need to be Insured

If you are an existing business, already have insurance, and are interested in expanding to Amazon, this point is specifically relevant for you. 

For example, if you already have liability insurance for selling outdoor furniture products on one platform, say, Shopify, and looking to expand your activity to Amazon.

Naturally, you may ask yourself whether your current liability insurance is enough to meet Amazon’s insurance requirements. In most cases, all you’ll need to do it add Amazon as an additional insured to the policy. However, there are some cases in which you might need to significantly modify your existing policy, or even buy an additional one. These include:

  • If you hold separate entities
  • You sell across different product categories on different platforms
  • Your sales volume has increased dramatically

To stay on the safe side, work with your broker to figure this out. If you’re not sure to what extent you’re covered and if you need help clarifying your status, Spott’s experts are happy to help and answer your questions. 

In Conclusion 

Although there are many things to take into consideration when opening your store on Amazon, one that should be taken seriously is the sustainability of your store. Many small businesses are looking to cut back and curb costs, but insurance should not be one of them. Protecting your store from unnecessary risk will prevent it from falling flat before it even kicks off. It takes one mistake or technical hiccup for a customer to file a lawsuit against you, and you want to be insured when that happens. Whether it is Amazon which has mandatory insurance requirements or any other platform, making sure that you have the right policy for your business is essential to keeping your store out of risk. To find out more, get in touch with Spott’s insurance experts to find out how you can guarantee your business a safe and secure future. Get your Amazon store insured in just 3 minutes and at the best price.