If you engage in e-commerce by selling online, you may find that you face similar risks as other businesses. The company requires those involved in the Amazon marketplace to obtain a certain amount of business coverage of up to $1,000 per event:
• Commercial General Liability Insurance
• Bodily injury insurance
• Personal injury insurance
• Property insurance
Amazon vendors should realize that this is limited coverage that will not protect them if losses require a larger claim. Like any businessperson, those involved in electronic commerce must assess their needs and purchase appropriate insurance protection.
Overall responsibility
General liability insurance is basic coverage for the online seller, just as it is for traditional retail outlets. It is there to protect your business from liability for:
– Insults
– Negligence
– Shocks
If a related claim occurs, this insurance may pay the payment you are judged to pay and legal expenses.
Products liability coverage is usually tied to this policy. Protects the manufacturer or seller from bodily injury or property damage to a third party resulting from a defective product.
There are cases, however, when this form of coverage does not help. Why? In the event that a seller is not properly qualified and files a claim, he may get a ‘no’ from the insurer.
Take the case of Mary, an Amazon seller who successfully sold skincare products on an online marketplace.
All was going well business-wise for Mary until the fateful day a consumer sued her over a serious skin outbreak attributed to creams Mary sent her. When Mary filed a claim, she was shocked: the insurance company denied her coverage because her policy was misclassified as an Internet retailer. As someone who put her company labels on her creams, she should have been branded a ‘manufacturer’!
Too bad your agent didn’t notice the mistake! The financial fallout had a far-reaching effect and eventually forced her to file for bankruptcy.
While this explains the urgency of keeping an eye out for policy issues, there are other forms of coverage that an Amazon seller should be very aware of.
Other Amazon Seller Policies
One of the main concerns that any Amazon seller has is the possibility of being suspended from the Amazon seller network. If this occurs, the loss of income can be substantial. Amazon suspension insurance policy is the number one recommended coverage for the industry across the board.
Other insurance policies to consider are:
• Commercial car
• Workers Compensation
• Umbrella/Excess
• Cyber Responsibility
• Oceanic marine
• EPLI
Of course, there’s no substitute for talking to an insurance professional who will guide you toward an insurance program that’s just right for you.
