Table of Contents

  1. Read This Before You Buy a Policy
  2. The Trigger: Monthly Sales
  3. A Change Listed for November 2, 2026
  4. What the Policy Has to Include
  5. The Insured Name Has to Match
  6. Why Coverage Matters Before the Rule Kicks In
  7. Where to Get a Quote
  8. Budget It Like Inventory
  9. Insurance and an LLC Do Different Jobs
  10. Questions for Your Broker
  11. Next Steps

1. Read This Before You Buy a Policy

I'm an Amazon seller, not an insurance broker or a lawyer. This post explains Amazon's published requirement and the general idea behind product liability coverage. Confirm your coverage with a licensed insurance broker, and run entity and liability questions past an attorney.

Everything Amazon-specific below comes from Amazon's Commercial Liability Insurance Requirements help page. Amazon updates it, so read the current version before you buy.

2. The Trigger: Monthly Sales

Amazon's help page points to section 9 of the Amazon Services Business Solutions Agreement. It says you must obtain and maintain commercial liability insurance within 30 days after exceeding USD 10,000 in gross proceeds in sales in one month on Amazon.com, or if Amazon otherwise asks.

Gross proceeds means sales, not profit. A month where you clear that sales level with thin margins still counts. Watch your monthly sales total in Seller Central so the 30-day clock doesn't surprise you.

3. A Change Listed for November 2, 2026

The same page lists added requirements effective November 2, 2026. If you sell in categories with enhanced safety listing requirements, you need the USD 1 million policy regardless of your gross sales.

Amazon links its list of those categories from the help page. If you sell toys, baby products or anything else Amazon flags for safety, check that list now instead of waiting for a sales milestone.

4. What the Policy Has to Include

Amazon's page lists the criteria. The main ones:

  • Commercial general, umbrella or excess liability insurance
  • Written on an occurrence basis (the page explains when a claims-made policy is acceptable)
  • A limit of at least USD 1 million per occurrence and in aggregate, covering products, completed operations and bodily injury
  • A deductible no greater than $10,000, listed on the Certificate of Insurance
  • Coverage for all products you list in the Amazon.com store
  • "Amazon.com Services LLC and its affiliates and assignees" named as additional insureds
  • No sunset clause, and at least 30 days' notice to Amazon of cancellation, modification or non-renewal

The page adds rules on the insured name and the insurer's financial rating. Hand the whole page to your broker so nothing gets missed.

5. The Insured Name Has to Match

Amazon's page says your insured name must match the legal entity name in your Account Info. For single-member LLCs, a trade name or DBA can also work when it differs from the legal name.

If you're planning to form an LLC, do it before you buy the policy, or plan to update the policy when you switch. The LLC post covers that decision.

6. Why Coverage Matters Before the Rule Kicks In

"You have to treat it that way. You have to know your numbers. If you don't know your numbers... you won't be successful in any business."

$0 to $4 Million With Amazon FBA: The Complete Strategy

Product liability claims come from injuries or damage a product causes. A claim can name more than the brand, and resellers can end up named too. Ask an attorney how that works where you live. Amazon's rule sets a minimum. Your broker can tell you whether you want coverage earlier based on what you sell.

Higher-risk categories deserve more thought: products people eat or put on their skin, children's products, electrical items, and anything that heats up. If you sell hazmat items, mention it to your broker up front.

7. Where to Get a Quote

Amazon says you can pick any insurance provider that meets its requirements. It also runs Amazon Insurance Accelerator, a broker-built network of providers that evaluates sellers and may offer policies. The help page links to it.

Get at least two quotes. Tell each broker your categories, your monthly sales, whether you sell through FBA or FBM, and any other channels like eBay. A policy priced on wrong information can leave you exposed when you file a claim.

8. Budget It Like Inventory

"Number two, you have to understand the concept of cash flow."

$0 to $4 Million With Amazon FBA: The Complete Strategy

A premium is a fixed cost that doesn't care whether this month was slow. Put it in your monthly cost sheet next to software and prep, and run it through your profit numbers before you scale categories. The FBA fees guide covers the Amazon side of that cost sheet.

Ask your CPA how to treat the premium. The seller tax basics post covers the records they'll want.

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9. Insurance and an LLC Do Different Jobs

An LLC can separate business liabilities from your personal assets, depending on your state's law. Insurance pays for covered claims. Plenty of sellers carry both. The order and the timing are questions for your attorney and broker.

Read LLC vs sole proprietor for the entity side before your broker call.

10. Questions for Your Broker

  • Does this policy meet every item on Amazon's Commercial Liability Insurance Requirements page?
  • Does it cover every category I sell, including new ones I add mid-year?
  • Does it cover sales on other marketplaces too?
  • How do I upload the certificate to Amazon, and who gets notified at renewal?

Want to see how I pick products and categories in the first place? Sign up for Thursday's free training and watch me source live.

11. Next Steps

Five posts that pick up where this one stops: