Amazon seller insurance requirements — what do I actually need?

No law requires an Amazon seller to carry insurance. Amazon does — by contract — and the sellers who treat the requirement as a compliance nuisance are answering the wrong question. The requirement exists because product liability claims flow to whoever sold the product, and Amazon has arranged, in writing, for that to be you. So there are really two things to get right: what the contract demands, and what actually protects you when a customer is injured.

What Amazon’s policy actually demands

The obligation sits in Section 9 of the Amazon Services Business Solutions Agreement, restated on Amazon’s commercial liability insurance help page:

Two details in that table do the most damage. The trigger is gross proceeds, not profit — a good Q4 can put a hobby-scale seller over the line. And the scope clause means a policy written around your main product line quietly fails the requirement the day you add a new category. The upload mechanics — certificates, entity-name matching, rejected proofs — are the sister site’s beat: see the compliance mechanics page.

Why Amazon wants onto your policy

Additional insured status is the tell. When a defective-product suit names both the marketplace and the seller — the normal pattern, since plaintiffs name everyone in the chain of sale — Amazon tenders its defense to your policy. Your $1 million limit is protecting two balance sheets, and yours is second in line in no particular sense: the limit simply erodes as defense and settlement costs accumulate for any insured on the policy. That is worth knowing when you decide whether $1 million — the floor Amazon demands — is also the ceiling you want.

What product liability coverage does for a seller

You do not have to manufacture anything to be sued over a product. Sellers, importers, and private-label brands get named routinely, and if you import, you are often the only defendant a US court can practically reach — the overseas factory is beyond the plaintiff’s effort, so the exposure concentrates on you. The coverage that responds is products-completed operations, ordinarily built into a commercial general liability policy rather than sold separately: it pays for bodily injury and property damage caused by products you sold, after they left your hands. Which purchase that means in practice — GL with products coverage versus a standalone products policy — is covered in product liability vs general liability.

The moves that don’t work

Seller forums are full of workaround attempts, and they fail in predictable ways:

• Vacation mode doesn’t remove the requirement. Once you’ve crossed the threshold, pausing the account doesn’t un-cross it — and it does nothing about liability for units already sold, which is the exposure that outlives the listing.
• You can’t negotiate the requirement away. Sellers ask Amazon to waive it; the Business Solutions Agreement is not a document individual sellers get to redline.
• Dropping coverage after the audit passes recreates the real problem. Products-completed operations claims arrive months or years after the sale. A policy that wasn’t in force when the injury occurred pays nothing, however diligent you were at upload time.

Questions sellers actually ask

Do I have to have liability insurance if I set my account on vacation? The requirement follows the sales threshold, not the account status — and your liability for products already shipped doesn’t pause either way.

Is it possible to remove the liability insurance requirement? No. It’s a term of the Business Solutions Agreement every seller accepts, and Amazon can also request proof from sellers below the threshold.

Do I need insurance to sell on Amazon at all if I’m under $10,000 a month? Amazon doesn’t demand it below the trigger (unless it asks), but the lawsuit exposure exists from your first sale. Under-threshold coverage is a risk decision, not a compliance one.

Do I need liability insurance for cosmetics or supplements? Amazon’s requirement is the same $1 million, but ingestibles and topicals are exactly where carriers narrow appetite and attach exclusions — read what the policy excludes before counting it as compliant coverage for your category.

Sources are linked below. The requirement terms follow Amazon’s Business Solutions Agreement as published and Marsh’s public restatement of it — not carrier marketing summaries.