When most sellers first start their Amazon business, they often don’t realize that if you’re a Pro Merchant Amazon will require you to have liability insurance.
This may sound intimidating to some, but e-commerce insurance isn’t as complicated (or expensive) as you may think.

If you’re selling on Amazon, you need to treat it like any other business, and having the proper insurance to protect yourself and your business is part of that.

Why do you need insurance to sell on Amazon?

The reason is very simple: To protect yourself/your company’s assets and cover any financial obligations resulting from accidents, injuries, or litigations.

Should you form an LLC for added protection?
It’s not required to have an LLC to sell on Amazon*. Having an LLC plus product liability insurance will give you more peace of mind, especially if you are a bigger seller.

Now on to Amazon's requirements (and where to find that information)!

In Seller Central, it is a little unclear where to find information on Amazon’s insurance requirements.

So basically this means if your sales are over $10,000 in one month, you will need to carry insurance with at least $1,000,000 in coverage.
Even if you’re just starting out or are a little below the insurance threshold, we still recommend being insured.

So where do I get liability insurance and how much does it cost?

Applying for Commercial General Liability, Umbrella, and/or Excess Liability Insurance coverage is pretty straightforward. Simply contact insurance companies such as Wells Fargo, Progressive, Geico, etc. to receive quotes. The average cost is typically around $500-$1,000 per year.

And that’s it!
As you can see, getting insurance for your Amazon business isn’t as difficult as you might think. Plus, it will give you and your business some much-needed protection.

In other words, have peace of mind so you can focus on growing your business.
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