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  • Writer's pictureCraig Gedey

Why is Amazon cracking down on liability insurance?

Updated: Feb 9, 2021

Thompson and Holt is reporting a sudden increase in Amazon Sellers making contact over warnings on their proof of liability insurance.

A number of clients have been issued with the following message from Amazon. It states: “We are writing to request that you provide proof of liability insurance for the products you sell through Amazon’s store, as required by your selling agreement with Amazon. Please respond by **/**/**.”

Amazon’s terms state that if you have over $10,000 of sales per month for three months in a row in the USA, you need to carry insurance with at least $1,000,000 in coverage. The amount varies from country to country. The full terms from Amazon are shown below.

Thompson and Holt managing partner Craig Gedey has urged Sellers to be vigilant amid what is clearly a policy to clamp down on this stipulation.

Gedey said: “Even if you have only just started your Amazon Seller account, or are just below the thresholds stated, we would still recommend being insured. Particularly in the current climate, situations can change very quickly with little notice. But at any time, if something happens with a product that you sell and a customer gets injured, you need to be protected.

“If you have already been suspended by Amazon over this matter, contact Thompson and Holt immediately to help get back online as quickly as possible.”

Amazon’s insurance terms

If the gross proceeds from sales of Your products processed through the Fulfilment by Amazon Service exceed the applicable Insurance Threshold during each month over any period of three (3) consecutive months, or otherwise if requested by us, then within thirty (30) days thereafter, you will maintain at your expense throughout the remainder of the Term public third party liability insurance in connection with each Amazon Site with at least the Insurance Limits per occurrence/aggregate covering liabilities caused by or occurring in conjunction with the operation of your business in connection with such Amazon Site, including products liability and bodily injury, with policy (ies) naming Amazon and its assignees as additional insureds. At our request, you will provide to us certificates of insurance evidencing the coverage required by this Section 8 to the following address: Amazon Services Europe S.à r.l., 38 avenue John F. Kennedy, L-1855 Luxembourg, Attn: Risk Management; and with a copy to: c/o Amazon, P.O. Box 81226, Seattle, WA 98108- 1226, USA, Attention: Risk Management.

‘Insurance Limits’ means the applicable one of the following:

$1,000,000 CAD, if the ‘Elected Country’ is Canada

$10,000,000 MXN, if the ‘Elected Country’ is Mexico

$1,000,000 USD, if the ‘Elected Country’ is the United States

Five Thousand Euros (€5,000) (if the Amazon Site is the DE Amazon Site, the FR Amazon Site, the IT Amazon Site, the ES Amazon Site or the NL Amazon Site)

Four Thousand British Pounds (£4,000) (if the Amazon Site is the UK Amazon Site)

Fifty Thousand Swedish Krona (kr 50,000) (if the Amazon Site is the SE Amazon Site)

Worried about an Amazon suspension?

If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.

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