Amazon has long maintained it’s only the channel between buyers and sellers on its marketplace and that it’s not involved in the sourcing or distribution of products sold by third-party sellers, removing Amazon from liability. It’s been a successful defense for Amazon in the past, including in a 2018 case concerning the purchase of a faulty hoverboard that exploded and burned down an Amazon shopper’s house in Tennessee. But NOT any more!!
According to CNBC, On Thursday, the California Fourth District Court of Appeals ruled that Amazon can be held liable for damages caused by a defective replacement laptop battery that caught fire and gave a woman third-degree burns. The woman, Angela Bolger, alleges she bought the laptop battery from a third-party seller, Lenoge Technology HK Ltd., on Amazon’s marketplace.
While the marketplace has helped Amazon bring in record revenue, it has also proven to host counterfeit, unsafe and even expired goods. The company has previously said it invests hundreds of millions of dollars per year to ensure products sold are safe and compliant.
The court said Amazon also can’t be shielded from liability through Section 230 of the Communications Decency Act, a law from the 1990s that protects online platforms from being held responsible for content their users post on their sites.
So what does this mean for you 3rd party sellers. I am sure you all know that Amazon has placed a rule in their TOS (Terms of Service) that states:
“Pro Merchants who sell on Amazon must provide proof of Commercial General Liability insurance. This insurance, obtained at the merchant’s expense, shall cover up to $1,000,000 per occurrence and in the aggregate and must include product liability, bodily injury, or personal injury, property damage, and other requirements as stated in the Amazon Services Business Solutions Agreement. The insurance must indicate that “Amazon.com, Inc., and its affiliates and assignees” are added as additional insureds.”
But we all know that Amazon has not been policing that rule. They only require it when they “Ask for it”. I expect BIG changes on that front. With this ruling coming down, Ashlin Hadden Insurance Agency expects that Amazon will now make 3rd party sellers required to show proof of Liability Insurance to “Keep Selling” on their platform to help mitigate their risk.
If you don’t have an insurance policy now, please visit our website and get a quote today. It takes just a few minutes and you could get covered for as little as $30.00 a month. Go to www.ecom.insure today or email us at Sales@AshlinHaddenInsurance.com or call the office at 765-432-8989.
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