Why do you need Amazon Seller Insurance?
Think about it. Someone purchases your lipstick and the next day wakes up with an allergic reaction. They head to the ER and guess what – they were allergic to the makeup! You could be sued to pay for the medical bills. After all, it was your product! Did you hear about the exploding hoverboard purchased on Amazon? Between the property damage and the injured customer, Amazon denied responsibility for the expenses.
This week, Amazon announced:
“Amazon will resolve and pay for valid property damage and personal injury claims against sellers under $1,000 as a concession to customers. Claims under $1,000 account for more than 80% of cases in our store, and Amazon will bear these costs and not seek reimbursement from sellers who abide by our policies and hold valid insurance. These concessions will not affect your order defect rate, and you will be kept informed at every step so you can continue to ensure your products are safe.”
What do you need to do?
If your gross earnings are over $10,000 / month, you will need $1 million in liability coverage, you will need Amazon seller Insurance and will need to add Amazon as an additional insured on the policy.
Good news or bad news?
To prevent things like this from happening, Amazon is now making sellers (who gross more than $10,000 monthly) add liability coverage. If you have liability insurance, your costs would be covered. If you don’t have insurance, you would have to cover those costs yourself. The result could be catastrophic.
That’s why it’s always a good idea to have liability insurance for whatever you sell, regardless of your gross sales earnings.
For sellers who have valid insurance (or claims up to $1000):
Amazon will pay for claims up to $1000.00
For sellers who do not hold insurance and / or for claims of higher amounts (over $ 1000)
Sellers who do not comply, or for claims exceeding $1000.00 – expect a payment demand from Amazon!! (We can only imagine the impact of non-compliant sellers)
Some final questions about Amazon Seller Insurance:
- How will Amazon force sellers to get insurance by September 1st (it’s only 3 weeks away) and enforce it?
- Will these be strikes against A to z claims? Amazon says they won’t affect your ODR, but will they really?
- What type of proof will Amazon demand from customers to show damages?
The experts at Axelligence are here to help with EVERYTHING Amazon from A to z! Whether you’re a pro or a newbie. Reach out and let us audit your account! Facing an Amazon suspension? We are the reinstatement experts! And….If you know the answers to any of those questions…let us know!