Amazon Product Liability Insurance: The $10,000 Rule Most Sellers Learn About Too Late

What Amazon Actually Requires

The obligation lives in section 9 of the Amazon Services Business Solutions Agreement, which almost everybody accepts without reading. It says that once your sales reach a certain level, you will carry commercial general liability insurance and name Amazon on it. That is the whole clause in plain terms, and it sits there quietly from the day you register.

The specifics matter more than the summary. Amazon asks for commercial general liability cover of at least $1,000,000 per occurrence and $1,000,000 in the aggregate, and that cover has to include products liability and bodily injury. The policy needs to come from an insurer with a solid financial strength rating, commonly expressed as A- or better from AM Best or an equivalent agency. And Amazon.com Services LLC, along with its affiliates and assignees, has to be named as an additional insured on the policy itself, not just mentioned on a piece of paper.

That last distinction trips people up constantly. A certificate of insurance is a summary document. Being named as an additional insured is an actual change to the policy, usually done through an endorsement. Some brokers will happily type Amazon's name into the certificate box without ever touching the underlying policy, which produces a document that looks right and is, in substance, wrong.

How the $10,000 Threshold Works

The trigger is $10,000 in gross proceeds in any single month. Not annual revenue, not profit, not a rolling average. One month above the line is enough to put you inside the requirement, and once you are in, you are expected to stay insured rather than dropping cover during slow months.

Gross proceeds means the money that flows through the account before Amazon takes anything out. Sellers regularly misjudge this because they think in terms of what actually lands in the bank. A seller doing $14,000 in sales with a $9,000 payout after fees and ad spend is well past the threshold even though the deposit looks modest. Refunds complicate it further, and the honest answer is that if you are hovering anywhere near $10,000, you are close enough that waiting for certainty is a bad trade against the cost of a policy.

There is a second reason not to wait. Insurance responds to when an incident happened, not when you bought the policy. A product that shipped in March and caused an injury in April is not covered by a policy you bought in June. Buying cover after a problem surfaces is the one purchase that definitively does not help.

Why Valid Policies Get Rejected

This is where most of the real pain lives. Sellers buy a genuine policy from a real insurer for a real premium, upload the certificate, and get a rejection with a generic message that does not say what was wrong. The policy is usually fine. The paperwork is not.

• The additional insured wording is incomplete. Amazon wants "Amazon.com Services LLC and its affiliates and assignees" as a single phrase. Certificates that say "Amazon", "Amazon.com", "Amazon Inc" or "Amazon FBA" get bounced. The phrase "and its affiliates and assignees" is not decorative, and leaving it off is probably the single most common failure.
• The named insured does not match Seller Central. The legal entity on the certificate has to be the legal entity on the account. If you registered as a limited company and the policy is in your personal name, or the company later changed names and the policy never followed, the two documents describe different businesses as far as a reviewer is concerned.
• The policy is claims-made rather than occurrence. Occurrence policies respond to incidents that happen during the policy period, whenever the claim arrives. Claims-made policies only respond if the claim is also reported during the period. Amazon expects the former, and general liability is normally written that way, but not always.
• Products liability is excluded. Some cheap general liability policies carve out products and completed operations, which is precisely the risk Amazon cares about. A policy that covers someone slipping in your warehouse but not your product causing harm does not meet the requirement.
• The certificate is expired or about to be. Reviewers check dates. A certificate with three weeks left on it invites a second request almost immediately.

The practical fix is to hand your broker Amazon's exact requirement text rather than describing it. Brokers who write for ecommerce sellers see this weekly and will produce the right endorsement without discussion. Brokers who mostly write for local trades may never have been asked to name a marketplace as an additional insured, and will default to their standard template.

Reading the Requirement Line by Line

It helps to treat the requirement as a checklist of separate conditions rather than one instruction, because a certificate can satisfy four out of five and still be rejected.

1. Type of cover. Commercial general liability, including products liability and bodily injury. Some sellers buy professional indemnity or product recall cover instead, which are different things and do not substitute.
2. Limits. $1,000,000 per occurrence and $1,000,000 aggregate at minimum. Per occurrence is the cap on a single incident, aggregate is the cap across the policy year. Both need to clear the bar.
3. Insurer quality. Rated A- or better by AM Best, or the local equivalent for non-US insurers. This rules out some very cheap unrated markets.
4. Additional insured. The exact Amazon entity phrase, added by endorsement to the policy.
5. Entity match. Named insured identical to the Seller Central legal entity, including suffixes like LLC or Ltd.

Stacking is allowed and is often the cheapest route to $1,000,000. A $500,000 general liability policy plus a $1,000,000 umbrella sitting above it gets you comfortably past the limit, usually for less than a single policy at the higher limit. Both documents go up together.

What This Actually Costs

Less than most sellers fear, and the fear is why some delay until they are forced. For a typical small to mid-sized seller in a low-hazard category such as home goods, apparel or accessories, annual premiums for $1,000,000 of general liability commonly land in the low four figures, and sometimes under a thousand dollars for smaller accounts. It is usually a rounding error against the revenue that triggered the requirement.

Category drives the price far more than revenue does. Anything ingested, applied to skin, used by children, powered by lithium batteries, or load-bearing sits in a higher band, sometimes dramatically so. Supplements, cosmetics, kids' products, electricals and anything mounted above a person are the categories where underwriters ask real questions and charge accordingly. If you sell in those spaces, budget properly and expect to answer questions about testing, labelling and your supply chain.

Amazon also runs an insurance referral programme connecting sellers to vetted providers who already know the requirement wording. It is not compulsory and it is not always the cheapest quote, but it removes the risk of a broker producing a certificate that fails review, which has its own value when a deadline is running.

What Happens When a Claim Lands

Amazon operates a process for customer product safety and injury claims that sits partly outside your control. For lower value claims, Amazon may resolve the matter with the customer directly and then look to the seller to stand behind it. For larger claims, Amazon will typically pass the matter to you and your insurer, which is precisely why it wants to know an insurer exists before anything goes wrong.

Two practical consequences follow. First, tell your insurer early. Policies contain notification conditions, and handling a claim yourself for a few weeks before looping in the insurer can genuinely prejudice cover. A message from Amazon about an injury is a notifiable event even if it looks minor and even if you think the customer is mistaken.

Second, keep the paperwork that a defence depends on. Supplier invoices, compliance certificates, test reports, batch records and the listing as it appeared at the time of sale all matter. Sellers who can show that the product met the relevant standard and that the listing did not overstate anything are in a very different position from sellers reconstructing a supply chain from memory a year later.

It is also worth separating the insurance question from the account health question. An injury claim can arrive alongside a product safety complaint that suppresses the listing. Those are two different processes with two different remedies, and resolving the insurance side does nothing to restore the ASIN. The listing comes back through the safety and compliance route, with documentation, not through your broker.

A Checklist Before You Upload

Run through this before submitting anything, because a rejected certificate costs days you may not have.

• Named insured matches the Seller Central legal entity exactly, including the suffix.
• "Amazon.com Services LLC and its affiliates and assignees" appears as additional insured, in full.
• Limits show at least $1,000,000 per occurrence and $1,000,000 aggregate.
• Cover is commercial general liability including products liability, written on an occurrence basis.
• Policy dates leave a comfortable runway, ideally more than sixty days.
• The insurer's rating meets the requirement, and you can say which agency rated it.
• You hold the endorsement document, not only the certificate.

Set a calendar reminder for renewal roughly six weeks before expiry. Amazon does not always chase a lapsed certificate immediately, but when it does, the request tends to arrive with a short fuse, and brokers move at their own pace. Sellers who treat this as an annual admin task rather than an emergency never think about it again.

The wider point is that insurance belongs to the same family of obligations as tax registration and product compliance. None of them grow your sales. All of them can stop your sales. They are worth handling early, boringly, and once, rather than under a deadline with a suspended account and a broker who is out of the office.

Frequently Asked Questions