Amazon Seller Insurance 2026: A Complete Guide

If you're selling products on Amazon, understanding your insurance requirements isn't optional—it's essential for protecting your business and maintaining your seller status. As e-commerce continues to grow, with

$1.3 trillion in e-commerce revenue generated in 2023, insurance has become a critical component of operating a successful online business [[1]](https://content.naic.org/sites/default/files/national_meeting/D Cmte Final Spring 2024 (1).pdf).

This comprehensive guide walks you through everything U.S. small-business owners need to know about Amazon seller insurance in 2026, from basic requirements to choosing the right coverage for your specific situation.

Why Amazon Requires Seller Insurance

Amazon's insurance requirements exist to protect both the platform and consumers from potential product liability claims. When you sell products through Amazon, you're entering into a marketplace where product defects, injuries, or property damage could result in costly lawsuits.

Recent court rulings in various jurisdictions have begun to hold platforms liable for third-party products if the platform exercised significant control over the transaction and delivery, making insurance requirements increasingly important for marketplace operators [2].

Commercial general liability insurance covers many of the common risks that can happen to any type of business, such as bodily injury or property damage on the business premises or due to the business operations, personal and advertising injury, and medical payments. For Amazon sellers, this protection extends to products sold through the platform [3].

Amazon's Basic Insurance Requirements

Amazon typically requires sellers to maintain commercial general liability (CGL) insurance with minimum coverage limits. While specific requirements can vary based on your sales volume and product category, most sellers need a policy with at least $1 million per occurrence and $2 million aggregate coverage.

The policy must name Amazon as an additional insured, which means Amazon receives protection under your policy if they're named in a lawsuit related to your products. This is a standard requirement across most major e-commerce platforms and retail partnerships.

Types of Insurance Coverage for Amazon Sellers

Commercial General Liability Insurance

Commercial general liability insurance is a broad type of insurance policy which provides liability insurance for general business risks. In the United States insurance market this is known as Commercial General Liability (CGL). It is the "first line" of coverage that a business typically purchases, and covers many of the common risks that can happen to any type of business, such as bodily injury or property damage on the business premises or due to the business operations, personal and advertising injury, and medical payments [3].

For Amazon sellers, CGL insurance typically covers:

Third-party bodily injury claims
Property damage caused by your products
Advertising injury claims
Legal defense costs

Understanding what a BOP covers can help you determine whether bundled coverage might be more cost-effective for your business.

Product Liability Insurance

Product liability insurance is crucial for Amazon sellers because it specifically addresses risks associated with manufacturing, distributing, or selling products.

Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. It functions as a bridge between Tort law and Contract law, aimed at ensuring consumer safety and allocating the costs of injuries resulting from defective products [2].

Many of the public and product liability risks are often covered together under a general liability policy. These risks may include bodily injury or property damage caused by direct or indirect actions of the insured. This coverage is especially important if you manufacture your own products or source them from overseas suppliers [4].

Professional Liability vs. General Liability

Some Amazon sellers may need additional coverage beyond general liability. If you provide consulting services, create digital products, or offer professional advice alongside physical products, you might need professional liability insurance. To understand the differences, review our guide on professional liability vs general liability coverage.

The primary reason for professional liability coverage is that a typical general liability insurance policy will respond only to a bodily injury, property damage, personal injury or advertising injury claim. Common claims that professional liability insurance covers are negligence, misrepresentation, violation of good faith, and inaccurate advice [5].

Business Owner's Policy (BOP) for Amazon Sellers

Many small Amazon sellers benefit from purchasing a Business Owner's Policy, which bundles multiple types of coverage into one package.

A business owner's policy - sometimes called a BOP - is a "package" product that typically includes property, business interruption/continuation and liability insurance. For many small businesses, purchasing a BOP can be a less costly option than buying individual policies [6].

A BOP typically includes:

General liability coverage
Commercial property insurance
Business interruption insurance
Additional coverages specific to your industry

For a detailed comparison of coverage options, check out our article on BOP vs general liability vs commercial property.

How Much Does Amazon Seller Insurance Cost?

The cost of insurance for Amazon sellers varies significantly based on several factors:

Sales Volume: Higher annual sales typically mean higher premiums because your exposure to risk increases with more transactions.

Product Type: Selling children's toys or supplements carries different risk profiles than selling books or clothing. Products with higher liability risks cost more to insure.

Claims History: A clean claims history can help you secure lower premiums, while past claims may increase your costs.

Coverage Limits: Higher coverage limits and lower deductibles increase your premium costs.

For many small Amazon sellers, basic CGL insurance can start at $500-$1,500 annually for businesses with lower sales volumes and low-risk products. However, sellers with higher revenues or riskier product categories may pay $2,000-$5,000 or more per year.

To get a better understanding of typical costs, read our breakdown of BOP cost for small businesses.

Certificate of Insurance Requirements

When Amazon requests proof of insurance, you'll need to provide a Certificate of Insurance (COI). This document summarizes your coverage and confirms that Amazon is listed as an additional insured on your policy.

Your COI should include:

Your business name and address
Policy number and effective dates
Coverage types and limits
Amazon listed as additional insured
Insurance company information

Learn more about obtaining and managing certificates in our guide on BOP vs general liability vs commercial property certificate of insurance.

Special Considerations for Different Seller Types

Private Label Sellers

If you create your own branded products, you assume greater liability than resellers. Your insurance should cover:

Manufacturing defects
Design defects
Failure to warn about product risks

Wholesale and Retail Arbitrage Sellers

Even if you're reselling existing brands, you can still face liability claims. Ensure your policy covers products you source from third parties.

Handmade and Artisan Sellers

Handmade product sellers face unique risks. Your insurance should account for the fact that you're both the manufacturer and seller.

FBA (Fulfillment by Amazon) Sellers

Using Amazon's fulfillment services doesn't eliminate your insurance requirements. You remain responsible for product liability even when Amazon handles storage and shipping.

Common Insurance Exclusions to Watch For

Not all CGL policies cover every risk. Common exclusions include:

Intentional Acts:

Liability insurance does not protect against liability resulting from crimes or intentional torts committed by the insured. This is intended to prevent criminals, particularly organised crime, from obtaining liability insurance to cover the costs of defending themselves in criminal actions brought by the state or civil actions brought by their victims [4].

Pollution and Environmental Damage: Standard policies typically exclude environmental claims.

Professional Services: If you provide consulting or professional advice, you'll need separate professional liability coverage.

Cyber Liability: Data breaches and cyber attacks usually require separate cyber liability insurance.

Recalled Products: Some policies exclude or limit coverage