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Liability Insurance for e-commerce.
We will be discussing the confusion surrounding the issue of liability insurance for the Amazon FBA pro seller account.
Do you need liability insurance to sell on Amazon FBA?
Even though Tracy is feeling under the weather, she still sits down with us to discuss the insurance requirements that Amazon has for sellers.
One of the members from Tracy’s Facebook Amazon 360 group, Helen, had posted a comment that she had been researching FBA for awhile and had no idea that Amazon expects FBA sellers to carry liability insurance. Tracy agreed with Helen and said that she didn’t understand that either, when she first started. She said that she suspects that a lot of sellers, don’t even know anything about it.
The information on the Amazon’s Sellers site is very confusing legal lingo, and that is if you can even locate it on the site so it creates a lot of gray areas where people are not sure of what is required from them.
Before Tracy made the video, she contacted customer service to clarify the requirements from Amazon. Now keep in mind that the information that you are going to hear, is only as accurate as the information from the customer service agent that Tracy spoke with.
Tracy is not an attorney or an insurance expert and she doesn’t play one on her Youtube channel! 🙂 This is just an opinion video and she is merely the messenger.
Amazon’s policy is that you have to carry a liability policy when you are a FBA seller or if you have a web store service which is an Amazon store. You do not need liability insurance if you have a regular seller’s account.
If you look at the other link that Tracy is putting at the bottom of her video,on the video pag of YouTube, you will actually be able to read the legal document from Amazon. Tracy speeds things up and reads the entire document in 36 seconds! Of course after she reads it, we all are still really confused as to what it even means.
Basically it says that if your sales proceeds, “exceeds the applicable insurance thresholds” which is 1,000,000 Canadian dollars, or 100 Japanese Yen or $10,000, and you are a FBA seller and if your proceeds have been the said amounts, for 3 months or longer, then you must have general, umbrella or excess liability insurance of at least $1,000,000.
Tracy posted the link for you to print and take to your insurance agent to show them what additional insurance that you are needing to secure. She mentions that the rates should most likely be between $200 -$1200 a year, depending on where you live.
Also, Tracy asked the customer service rep if there were any other requirements if you sell in the grocery category and if every seller needed to carry the additional coverage. The answer she was given was: “No”. But as Tracy mentions, with food allergies,etc. it would be a wise business decision to protect yourself, just in case.
People often ask : “where do I get liability insurance from”? She shares with us that most people put it on their home owners policy as an umbrella. You can send the sheet to several different agencies and see which one gives you the best rate.
Tracy assures us that it is not as scary as it seems and reminds us that this is just her opinion and that you should call Amazon and talk with them and then contact your insurance agency directly!
Hope this video was helpful.
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