Selling on Amazon? Insure Yourself With Liability Coverage

From defective items to customer complaints or even liabilities caused by shipping damages, Amazon’s default insurance coverage doesn’t always offer the protection you need. That’s why it’s essential that you have product liability insurance in place to protect yourself and your business. Product liability insurance, also known as product recall or warranty coverage, is a type of policy that covers the costs associated with replacing or repairing faulty items or reimbursing customers for any damaged items that might occur after delivery. This type of coverage also provides protection against legal costs and expenses in the event that someone takes legal action against you due to an injury caused by a product manufactured by your company. In this article, we will discuss how product liability insurance works and how to find the best coverage for your business. We will also provide key tips on how to minimize potential losses from Amazon products.

What Is Product Liability Insurance and Why Is It Important?

Product liability insurance is a form of risk management that protects businesses from potential claims made by customers, who allege a product they purchased caused an injury or damage. In other words, it’s the ultimate safety net to protect your business against financial losses associated with product-related lawsuits. Having this coverage is especially important if you own an Amazon store, since the marketplace’s indemnification obligations protect Amazon, not you. Liability insurance can help if a manufacturer fails to hold up their end of the bargain or if someone suffers an injury from using one of your products. Whether you sell digital or physical goods, product liability insurance can provide protection for both tangible property and bodily injury claims. It can also provide protection from financial damages from reputational harm that may be caused by defective products. With this coverage in place and a comprehensive product testing program in place, your Amazon store will be well on its way to success.

Understanding the Risks of Selling on Amazon

When selling on Amazon, it is important to consider the risks associated with the products that you are selling. As a seller, you can potentially be held liable for any damage or injury caused by your products—even if you had nothing to do with the underlying cause. This is why Amazon Product Liability Insurance is so important for sellers.

This kind of insurance protects sellers from being held financially responsible for damages caused by their products. It covers things like:

  • Bodily injury and property damage resulting from any product that you sell
  • Legal defense costs if you are sued
  • Claims related to property damage by a third party resulting from a product
  • Financial protection against punitive damages in certain cases.

Ultimately, Amazon Product Liability Insurance gives sellers peace of mind knowing that they are protected should something unfortunate happen with their product after it has been bought and used. This can be a key part of protecting your business and ensuring its longevity in the long run.

What Types of Coverage Are Available?

If you’re an Amazon seller, you may be considering product liability insurance to protect yourself and your business. But what types of coverage does Amazon Product Liability Insurance offer?

Personal Injury Coverage

This type of coverage helps protect you if a product causes injury or death to another person. It pays for your legal defense in the event of a lawsuit, and any settlement or judgment that results from it.

Property Damage Coverage

Property damage coverage protects you if a product breaks or damages someone else’s property. This could be anything from a physical item to another person’s right to privacy or reputation.

Advertising Injury Coverage

Advertising injury coverage covers monetary damages resulting from libel, slander, copyright infringement, or intellectual property infringement in your advertising materials. It also pays for associated legal costs and judgments related to these claims. Amazon Product Liability Insurance is an important component of the Amazon selling process, as it gives Amazon sellers peace of mind knowing they are covered in case something goes wrong with their product. With the protection of this insurance, Amazon sellers can focus on growing their business and reach customers with confidence.

Factors That Impact Your Premium

It’s important to understand the factors that influence your premium, so you can make the best decision for your business.

Product Risk

The products you sell will play a large role in determining your Amazon Product Liability Insurance premium. Generally speaking, the riskier the product and category, the higher your premium will be. This includes products that are:

  • Flammable or explosive;
  • Contain hazardous materials;
  • Involve batteries;
  • Have small pieces that pose a choking hazard;
  • And/or physical activities (sports equipment).

Volume & Value of Sales

The amount of inventory you bring onto Amazon can also help determine your premium. The higher-value items you have in stock, and/or larger volumes overall, could lead to paying a higher premium since there is more at stake in case of accidents or incidents related to your products.

Online Selling & Shipping Platforms Used

If you are selling on other online platforms like eBay and Etsy, as well as shipping out through third party services such as UPS and FedEx, then it is important to include those in your coverage plan. This will ensure any liabilities related to those platforms or services are covered if something should happen while customers are using them with your products.

What Amazon Sellers Should Consider When Shopping for Liability Insurance

When it comes to protecting yourself and your business, Amazon sellers should weigh the risks of product liability. The best way to do this is by shopping for the right coverage from a reputable insurer. Here are some tips to consider: .

Product Coverage

Product coverage should be included in your policy. This coverage protects you should a customer make a claim for damages or injuries resulting from the use of your product. Most policies will provide coverage for manufacturing defects and errors in design, as well as potential claims arising from mislabeling or warnings about potential harm.

Personal Injury Coverage

A good liability insurance policy should also include personal injury coverage. This coverage can help protect you from claims of slander, libel, invasion of privacy, and copyright or trademark infringement, as well as any injury that arises out of the use or misuse of your products or services.

Coverage Limits

It’s important to keep in mind that each policy may have specific limits on how much coverage is provided. Make sure to read through all the details and understand what is covered and what is not covered by your chosen policy before signing on the dotted line.

Best Practices for Protecting Yourself Against Product Liability Risks

When selling products on Amazon, you should take all necessary steps to ensure you are protected against product liability risks. Here are some best practices that can help you protect yourself:

  1. Make sure your products are qualified and certified, as required by Amazon and any applicable laws.
  2. Conduct a thorough review of product safety guidelines prior to listing a product and regularly review them to ensure your products comply with all regulations.
  3. Research and analyze any potential liability risks associated with your specific products, including any recalls or other warnings related to them.
  4. Ensure proper labeling, storage, and shipping of the products so that customers can be informed about the proper use of the product before it reaches them for maximum protection against any potential liability risks.
  5. Educate customers on proper use of the product; provide a user guide or informative video to highlight potential safety hazards that may not be obvious from the package alone.
  6. Develop an effective return policy and process; this will help limit your liability in the case of an issue with one of your products and encourage customers to report problems right away if they occur.
  7. Purchase Amazon Product Liability Insurance; this insurance gives you peace of mind and provides coverage for legal costs in case a customer does suffer injury due to a defective product purchased from you on Amazon’s platform.

Conclusion

In conclusion, Amazon Product Liability Insurance is an essential coverage for any Amazon seller, regardless of their product type or customer base. This coverage helps protect you from the potential risks and liabilities associated with selling on Amazon, including claims of product defects, personal injury, and property damage. In the event of a claim, this coverage provides financial protection and assistance with the legal representation you may need. Investing in Amazon Product Liability Insurance gives you the peace of mind knowing that you are well-protected as an Amazon seller.
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Krystel Borg

Krystel possesses a unique expertise in transforming company sales, thanks to her knack for devising strategic blueprints and fostering high-performing teams. Throughout her career, she’s been at the helm of businesses that have burgeoned from mere startups to eight-figure giants. She boasts two notable exits in the CPG sector, with one being the acclaimed Swander Pace Private Equity Group.
Her profound understanding of product-centric ventures spans the entire lifecycle—from conceptualizing brands to overseeing logistics, supply chain management, and devising robust digital marketing initiatives. One of Krystel’s standout accomplishments in sales is her tenure with QVC, where she not only celebrated over 100 on-air appearances but also clinched a nomination for their coveted “Rising Star” award, sharing the limelight with industry titans like Sephora.
With a proven track record of scaling startups to monumental heights—like achieving $1.5M in revenue within a year and subsequently doubling it—and salvaging firms from deficits to enjoy $1.8M profits, Krystel’s prowess is undeniable. She masterfully steered a company to emerge as an unrivaled leader in its sector by multiplying its sales from $4M to $18M in half a decade.
In recent years, Krystel has channeled her vast experience into mentoring, playing pivotal roles as a consultant or board member to embolden fellow entrepreneurs. Her versatility is further accentuated by her engagements across diverse industries

Navin Williams

With 11 years of leadership experience in Business Management, Navin Williams has consistently delivered transformative results. His leadership has championed small businesses on their path to accelerated growth, steered large enterprises towards a surge in efficiency by up to 40%, and provided strategic direction to e-commerce companies navigating the dynamic digital marketplace.
His toolkit of expertise encompasses spearheading organizational transformations, enhancing business agility, and driving process efficiency across a spectrum of domains and frameworks, with a particular emphasis on Lean principles. Understanding the unique challenges and opportunities presented by both brick-and-mortar operations and digital storefronts, Navin is adept at crafting strategies that align with specific business objectives.
His commitment to rigorous reporting ensures transparency and data-driven decision-making, solidifying his reputation as a versatile and results-driven business leader.

Jane Sampson

Jane Sampson boasts over 15 years in the Apparel & Home Fashions sector. Throughout her career, she’s demonstrated a depth of knowledge in areas like Design, Product Development, Global Sourcing, and Market Research. Her business acumen is backed by a proven record in Procurement, Business Planning, and Sales.
Central to Jane’s professional journey is JANEEN HOME LLC. This company, under her leadership, specializes in introducing new textures, designs, and prints for bedding and soft home lines. Her brand’s presence is felt in prominent retailers such as Macy’s, Ross Stores, Hobby Lobby, Bealls, and Belk.
Beyond her corporate achievements, Jane shares her industry insights as an Adjunct Professor at Baylor University. She remains committed to fostering growth and nurturing future talents, ensuring they’re equipped for success in the dynamic world of Apparel & Home Fashions.

Archana Reddy Williams

From the corporate world to the dynamic world of Amazon, Archana’s journey has been nothing short of transformative. As a seasoned management consultant, corporate leader, and a 7-figure Amazon seller, she founded CartKaboom with a vision to demystify the Amazon maze for brands.
What drives Archana? Her passion for ensuring every brand gets a fair shot at success on Amazon. CartKaboom works tirelessly as a partner, acting as a true extension of brands, ensuring they shine in the Amazon marketplace. While she cherishes working with all types of businesses, Archana’s heart holds a special place for family-owned and women-led brands. Drawing from a wealth of firsthand insights and tailored strategies, she’s had the honour of propelling many of these businesses to 7+ figure successes on Amazon.
At the heart of CartKaboom, it’s not just about metrics. Archana delves deep into a brand’s narrative and core values, designing Amazon-focused strategies that amplify their presence. From listing enhancements and keyword optimization to effective advertising campaigns, Archana ensures that brands don’t just survive, but thrive in this ecommerce behemoth. Outside the world of ecommerce, Archana is active in real estate. As an Accredited Real Estate Investor and a CRE General Partner, she oversees diverse commercial real estate ventures, bringing the same dedication and business acumen to this vertical.
At the core of it all, Archana’s faith in God and her family remain her pillars. She resides in Dallas, Texas with her husband and three kids. For relaxation and fun, she enjoys travelling, hiking, and exploring nature, seeing it as a reflection of God’s beauty. She’s also active in local church initiatives, emphasising community growth and unity.