Amazon Expands Commercial Liability Insurance to Nine European Countries and Canada

Recently, many cross-border e-commerce sellers received emails regarding commercial liability insurance in Europe. Many sellers expressed confusion about these new requirements and were unsure how to respond. To help you better understand and comply with these regulations, the Forest Shipping team has compiled detailed information and key considerations regarding commercial liability insurance in the U.S. and Europe. We hope this will clarify any questions you have and help ensure smoother business operations.

1. Expansion of Commercial Liability Insurance to More Sites

As of September 1, 2021, Amazon required sellers with monthly sales exceeding $10,000 on the U.S. site to purchase commercial liability insurance within 30 days and designate Amazon as an additional insured. In 2024, this requirement was extended to include nine European countries and the Canadian site.

If your monthly sales on the relevant Amazon sites meet the threshold requiring comprehensive commercial liability insurance, but Amazon finds that you have not purchased this insurance during the applicable claim period or have not submitted a valid proof of insurance on time, Amazon may take actions such as restricting your ability to sell specific product categories or even suspending your account until you provide proof of insurance.

Monthly Sales Thresholds for Insurance Requirements by Country/Region:

Sellers can consult insurance providers to find solutions that meet Amazon’s insurance requirements or choose to purchase insurance through the Amazon Insurance Accelerator. From 12:00 AM on June 15, 2024, if sellers purchase policies through the Amazon Insurance Accelerator, and truthfully declare their products and corresponding sales on all relevant Amazon sites, the coverage can extend to all Amazon sites.

2. Protecting the Interests of Amazon Sellers

As cross-border e-commerce continues to grow rapidly, the risks sellers face are also increasing, with product liability being a significant concern. In most countries or regions worldwide, strict liability principles apply to product liability. If a product has a defect and causes damage to the user, both the manufacturer and the seller must bear compensation responsibilities. Therefore, if a product liability incident results in consumer injury or property damage, sellers may face:

• Financially: Sellers may suffer substantial economic claims and incur high investigation and legal costs.
• Operationally: They may be embroiled in long-term investigations, mediations, and court rulings.
• If the court rules unfavorably: Sellers may be required to pay significant compensation, placing an additional financial burden that could negatively impact future business operations.
• If the case is mishandled: And the media amplifies the issue, it could trigger a chain reaction, leading to more claims and damaging the store's reputation.

3. Real Case Warnings

• Fan Fire Incident: A seller’s fan caught fire at night, resulting in a total loss of the warehouse, with a claim amounting to $21 million.
• Battery Fire Incident: A seller’s battery caused a fire, leading to severe damages, with claims reaching $17 million.
• Pet Product Safety Issue: A fire insurance company’s lawyer in New York filed a claim against a seller, alleging that the pet heating pad they sold caused a fire, resulting in over $400,000 in damages.

These real cases serve as warnings that if similar incidents occur, sellers may not only face significant compensation but also need to cover high legal defense costs. Obtaining adequate commercial general liability insurance can effectively mitigate related product liability risks.

4. Insurance Requirements

Your commercial liability insurance policy must meet all of the following standards:

• Minimum Coverage: The policy must provide at least $1 million per occurrence and $1 million aggregate coverage, covering all liabilities arising from or related to your business operations (including product liability, product/completed operations liability, and bodily injury).
• Policy Type: It can be a Commercial General Liability (CGL) policy, an umbrella policy, or excess liability insurance and must specify occurrence-based coverage.
• Global Claims Handling: Your insurance provider must have global claims handling capabilities and a financial rating of at least S&P A and/or AM Best A or higher (if S&P or AM Best is not valid or used in the country/region where you need to insure, equivalent local ratings are acceptable).
• Notification Requirement: Your insurance provider must provide Amazon with at least 30 days' notice of any cancellation, modification, or non-renewal.
• ACORD Certificate: Your insurance provider must issue an ACORD certificate of insurance and provide a trackable code or verification method.
• Additional Insured: The policy must name "Amazon.com Services LLC. and its affiliates and agents" as additional insureds.
• Deductible Limits: The policy’s per-occurrence deductible must not exceed $10,000, and any deductible must be listed on the certificate of insurance (COI).
• Coverage for All Products: The policy must cover the sale of all products listed on the Amazon site.
• Insured Name: The insured name must match the "legal entity" name provided to Amazon (to view your legal entity name, refer to your account information page).
• Complete and Signed Policy: The policy must be complete and signed.
• Policy Validity: The policy must be valid for at least 60 days from the date of submission.

5. How to Purchase Insurance?

If you are currently uninsured or plan to purchase a new policy, you can:

• Choose any insurance provider that meets the insurance requirements listed below.
• Opt to purchase insurance from providers participating in the Amazon Insurance Accelerator program. This program was created by Amazon to help sellers purchase insurance more conveniently and affordably while obtaining coverage. Insurance providers participating in this program will evaluate sellers and offer commercial liability insurance at competitive rates to eligible sellers, who only need to cover the insurance costs.

6. How to Purchase Insurance through the Amazon Insurance Accelerator?

For U.S. Site Sales:

• Log in to the Amazon Seller Central, select [Settings] > [Account Info] > [Business Info Section] > [Commercial Insurance] > [Get Insurance].
• Select China as the business registration location, and click Purchase Insurance from the insurance provider.

For Other Site Sales:

You can copy the following link into your browser to go to the insurance purchase page for more operations:

     [Insurance Purchase Link](https://www.marsh-vmp.com/amz/login?source=XLpR6C3PRbYn&guid=0e656d2c-9e90-168a-e5a6-27b109248726)

7. How to Upload the Certificate of Insurance (COI)?

If your sales on Amazon involve the U.S. site, please access the insurance upload page from the insurance portal on Amazon Seller Central:

• Log in to Amazon Seller Central, select [Settings] > [Account Info] > [Business Info Section] > [Commercial Insurance] > [Upload Insurance Certificate].
• On the upload page, fill in the insurance company name (matching the “insurer” on the certificate), insured name (matching the "legal entity name" on the Amazon account page), policy number (found on the certificate), policy period, upload the COI, and click submit.

If your sales on Amazon do not involve the U.S. site but only other sites:

If any month's sales on Amazon meet the insurance requirement, you must obtain and maintain valid commercial general liability insurance.

Amazon may contact you at any time to request relevant insurance certificates/proof.

Ensure your commercial liability insurance meets the latest requirements to safeguard your business. If Amazon sellers need freight forwarding services, please contact us for expert support.