Effective June 27, 2022, Amazon updated its United States Commercial Liability Insurance Program policy. For more information on what this could mean for your business, please read on, then reach out to AVASK Group today.
Do you need this type of insurance?
Yes. This type of business insurance helps Amazon sellers recover from costly accidents, such as a fire at a storage unit that destroys your inventory. Some policies are required once you sell a certain amount.
What are the new changes to the Commercial Liability Insurance Program Policy?
Amazon has made the two following changes to its policy:
- Your policy can include a deductible if:
- Your gross proceeds from sales of your products in the Amazon.com store exceed USD 1 million in the last 12 months, and
- The deductible is listed on your Certificate of Insurance
- For single-member LLCs, the insured name can match either your legal entity name or the name you publicly use to identify your business, i.e. trade name, DBA, et cetera
What are the requirements for Amazon’s updated Commercial Liability Insurance Program Policy?
To qualify, your commercial liability insurance policy must:
- Be either commercial general, umbrella or excess liability and be occurrence-based, except for certain product categories
- Be at least USD 1 million per occurrence and in aggregate, and cover liabilities caused by or occurring in conjunction with your business operations, including products, products/completed operations and bodily injury
- Meet the updated criteria mentioned in the preceding section
- Cover all sales from products you have listed on the Amazon.com store
- Name “Amazon.com Services LLC and its affiliates and assignees” as additional insureds
- Include your insured name that matches the “legal entity” name you provided to Amazon in your Account Info, except for single-member LLCs, where your legal entity name is different than the name you publicly use to identify your business
- Be from an insurance provider that has global claim handling capability and a financial rating of S&P A- and/or AM Best A- or better
- Be completed in its entirety and signed
Once you have met all of those requirements, your insurance provider must give Amazon at least 30 days’ notice of cancellation, modification or nonrenewal.
If you have any further questions about this or other Amazon-related topics, please reach out to Timothy E. Nelson, CPA today.
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If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation.