FAQs ABOUT ECOMMERCE INSURANCE

If you happen to sell an array of different types of products on Amazon (or any eCommerce platform), it’s often easier (and generally more beneficial to you) for us to separate those products under different policies. That way, you aren’t paying the same price for a policy for pens as opposed to medical devices (which are obviously way more expensive to insure).  

If you are in OA or RA, an insurance carrier will classify you as a “reseller” only if you keep your products in their designated packaging upon resell. Once you take them out of that packaging to sell those products, you become more of a liability to insurance companies because it’s harder to track who is “at fault” for the claim. 

We get it. It’s super frustrating when you are looking for an insurance quote through one insurance broker and you have to essentially fill out the same information over and over again. But each carrier has a certain way they like things and we’re continuously picking up new carriers. If you want to get an expansive portfolio of business insurance options you unfortunately have to play the long game. 

Insurance companies (particularly ones for surplus insurance policies) are going to request an audit. Why? Because they think you are lying. Why do they think you are lying? Because businesses lie to them all the time. DON’T LIE. They will find out one way or the other, and that could result in termination of your policy.

Because we just love sucking money out of your pockets, of course! Sarcasm aside, we really can’t speak for other insurance brokers or agencies. However, this is definitely one of those situations where you get what you pay for. As an example, one of the most popular insurance companies for Amazon sellers is going out of business because they weren’t charging enough for premiums which resulted in them not being able to sustain their claim payouts. You don’t want to learn this when you are in the middle of a lawsuit, we promise you.  

Due to Amazon renaming their entity last year, all the insurance providers subsequently have had to charge an updated policy endorsement fee for sellers that sell on Amazon. So, while you have a blanketed endorsement for your other selling platforms, you also have to pay an additional cost for Amazon.  

Amazon requires a 30-day notice of insurance policy cancelation. In other words, if you have to cancel your plan, your carrier has to notify Amazon within 30 days and that transaction costs $150. 

When you apply for your business insurance, you have to provide a number of what your projected yearly revenue will be. Your insurance surplus carrier wants to make sure that the amount you provided is accurate. If you don’t do the audit yourself, the surplus carrier will do it for you and the number they come up with is usually higher than what your actual sales are. This will mean your insurance premiums will go up. 

A standard line carrier is bound by State and Federal regulations and provides basic insurance coverage that the laws dictate for businesses. A surplus (aka high-risk) carrier will take on businesses with more “perilous” products and/or services. 

If you are an Amazon seller, you are required to have general liability and product liability insurance with up to $1 million in coverage. But that’s it. An excess insurance policy will cover you for an additional $1 million and is a recommended option for Amazon and eCommerce businesses that have high-risk products. 

So, you just started your Amazon or eCommerce business, and you get general coverage for the product/s you are currently selling. If, in a year, your business decides to start selling a completely different product, your insurance broker or carrier HAS TO KNOW to add a product specific insurance policy. Otherwise, anything related to that new product will not be covered. 

If you are an Amazon seller, you are only required to have product and business lability insurance. However, we do offer the option of cyber liability and recall insurance because general insurance policies don’t offer those. To learn more about these types of policies, check out our Insurance Product page.  

Go to your S.C. account and click on the business insurance page. When it asks for the “insurance provider name”, make sure you are adding your insurance carrier NOT you insurance agent/broker (who would be Ashlin Hadden).  

You also HAVE to make sure that your insured name is written EXACTLY how it is on your insurance certificate when prompted. No changes in spelling or adding commas or abbreviations. Amazon will reject it if the two names aren’t matching.  

Monthy to quarterly, make a point to spend 20 minutes going through your store/office/workspace and video recording every inch of it. In the event that your supplies and products are damaged, you will need to know exactly what needs to be replaced. This routine, 20-minute exercise will make your life significantly easier. 

Insurance carriers rate your eCom business based on WHAT you’re selling, WHERE you are selling, HOW/WHERE you are sourcing, and WHO you are selling to (along with a lot of other factors). This “rate” is really a “risk” score that an insurance company uses to establish how likely your business is to get a claim. The higher your risk score, the higher your premium and deductible is likely to be.