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Amazon Updates Insurance Requirements, A-to-Z Claims Policy

Amazon Updates Insurance Requirements, A-to-Z Claims Policy

Amazon launched a new policy to protect customers against defective products that cause property damage or personal injury, regardless of whether Amazon or a third-party merchant sold the items.

In conjunction with the new A-to-z Claims Process for Property Damage and Personal Injury, Amazon is modifying its existing requirement that sellers obtain insurance, and it created a network of vetted insurance providers. Amazon explained:

“Amazon has a long-standing requirement that sellers obtain product liability insurance and name Amazon as an additional insured once they reach $10,000 in sales for three consecutive months on Amazon. We are updating this requirement and effective September 1, 2021, our Business Solutions Agreement will require sellers to obtain product liability insurance and name Amazon as an additional insured once you reach $10,000 in sales in one month on Amazon.com.

“If you are a new seller or are an existing seller looking for a new policy, we have worked with an insurance broker to create Amazon Insurance Accelerator, a network of vetted insurance providers to help you easily and affordably secure liability insurance. These insurers can evaluate and if appropriate, offer liability insurance at competitive rates to qualifying sellers. We will continue to expand Amazon Insurance Accelerator to include more providers over time. You can learn more and contact the providers here 299. If you already have insurance, please confirm it is up-to-date and saved on the Business Insurance page in Seller Central.

“Amazon stands behind you and the hundreds of millions of products our sellers offer customers. With the expanded A-to-z Guarantee, we’re proud to continue to partner with you to provide customers with peace of mind every time they shop in our store and to help you increase sales and grow your businesses.”

Amazon announced the new policy and programs on Tuesday and set up a special area on the discussion boards to answer sellers’ questions about its insurance requirements.

It also provided the following answers to some frequently asked questions by sellers:

Can I bring my own insurance?
Definitely, as long as it meets our insurance requirements. The Amazon Insurance Accelerator panel is there to help you easily find insurance, but you can bring your own insurance.

Is Amazon taking a cut from the Insurance Accelerator insurers?
Not a penny. The transaction is between you and the insurance provider you choose to go with; we do not receive any commission or referral fees from Amazon Insurance Accelerator.

Is Amazon going to charge me for claims under $1K?
No. As long as you have insurance, we will handle and pay valid claims under $1K, which we know from past data make up 80% of claims filed. We’re trying to make these claims stress-free for you.

What types of claims are eligible for this process?
Only valid property damage or personal injury claims that can be proven to have been caused by a defective product are eligible for this process. This will not cover any property damage or personal injury resulting from the use of a product that is not defective.

Amazon posted a general announcement on its AboutAmazon.com corporate blog, explaining that beginning September 1, 2021, it will facilitate the resolution of property damage and personal injury claims between the customer, the seller, and their insurance provider.

It also noted, “Now, in the unlikely event a defective product sold through Amazon.com causes property damage or personal injury, Amazon will directly pay customers for claims under $1,000—which account for more than 80% of cases—at no cost to sellers, and may step in to pay claims for higher amounts if the seller is unresponsive or rejects a claim we believe to be valid.”

And Amazon linked to the policy help page.

Amazon also posted information for sellers on Seller Central, where it stated:

“Amazon will resolve and pay for valid property damage and personal injury claims against sellers under $1,000 as a concession to customers. Claims under $1,000 account for more than 80% of cases in our store, and Amazon will bear these costs and not seek reimbursement from sellers who abide by our policies and hold valid insurance. These concessions will not affect your order defect rate, and you will be kept informed at every step so you can continue to ensure your products are safe.”

There is a lot that is changing – now is the time to get acquainted with the changes and how they may impact you.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.