FAQs ABOUT ECOMMERCE INSURANCE

If you are a diverse seller on any third-party selling platform with many product types and/or a large sales split over product categories, it’s often easier (and generally more beneficial to you) for us to separate those products under different policies. Sometimes, it becomes necessary. 

If you are an arbitrage seller, an insurance carrier will classify you as an online retailer only if you keep your new products in their designated packaging upon resale. Insurance underwriters must categorize you as a wholesaler or manufacturer if you alter the packaging in any way (such as bundling), relabel with your brand, add your company information, or order products from a supplier/contract manufacturer with your company’s desired specifications. 

The more information you can provide us about your business operations, products, and sales revenue, the more accurately we quote and provide policies that offer best fit coverages for your business while maintaining fiscal awareness. 

Insurance companies charge premium based on sales exposure or units sold, so most are going to request an audit towards the end of your policy term. Why? The carrier wants to verify that the amount of coverage provided is reflective of your accurate exposure at the end of your term.  

Our agents work specifically with Amazon sellers and their products, so they are acutely aware of Amazon’s requirements for your policy, as well as reading the policies to make sure that your business classification and products are correctly listed on your policy. We have found that “cheaper quotes” do not necessarily provide accurate or adequate coverage; this is not something you want to find out when a customer has a claim against you!  

Amazon requires they be named Additional Insured on your insurance policy, per their Terms of Service, and all carriers charge premiums for this endorsement on your policy. So, while you have a blanketed endorsement for your other selling platforms, you also may be required to pay an additional cost for Amazon to be individually listed. 

Amazon requires a 30-day notice of cancelation for any insurance policy in which they are a certificate holder. If your policy cancels for non-payment, your carrier has to notify Amazon within 30 days and the endorsement can adjust premium with some carriers. The charge is added to the overall policy cost you pay at the beginning because that is an endorsement to the schedule of forms. It’s not charged when your policy cancels.  

A standard line carrier is bound by State and Federal laws and regulations and is overseen by governing bodies that provides basic insurance coverage rules. These carriers have state insurance resources that they can pull from if they ever run out of money for claim payments. These carriers have limits to the types of risks they are willing to take on. A surplus (aka high-risk) carrier will take on businesses with more “perilous” products and/or services, and they may charge more because they don’t have state resources to fall back on. 

If you are an Amazon seller, you must have general liability and product liability insurance with $1 million in coverage. But that’s it. An excess insurance policy will cover you for an additional $1 million or more. It is a recommended option for Amazon and eCommerce businesses that have high-risk products. Other business contracts may require higher limits of coverage that your basic policy can’t guarantee.  

You may only want coverage for the items that you are selling online, or a carrier may limit what products they are willing to insure. This would be done with a Specified Products policy.  

If you are an Amazon seller, you are only required to have general liability including product liability insurance. However, we do offer the option of cyber liability and product recall insurance because basic insurance policies don’t offer those coverages. To learn more about these types of policies, check out our Insurance Product page. Some of our carriers know that you may also want this type of coverage based on your business operation, so they offer it up front. However, we can also obtain those additional policies at any time during your policy term. 

Go to your Seller Central 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 your insurance agent/broker (Ashlin Hadden).  Your policy number, term dates, and coverage limits will all be listed on the Certificate of Insurance (COI) that is sent to you when you purchase your policy. 

For property-related claims, we recommend that monthly to quarterly, you spend a little bit of time going through your store/office/workspace and video recording every inch of it. If you experience a loss, you will need to know exactly what needs to be replaced. This routine, 20-minute exercise will make your life significantly easier. We also recommend that you go over your product labels and websites to make sure that your instructions, warnings, product descriptions, and Prop 65 mandates are up to date and accurate, so that you can avoid frivolous claims. Periodically check the internet for potential copyright violations, governing body recalls and/or mandates, compliance laws, and monitor your marketing campaigns and social media presence for any content that could be seen as slanderous, libelous, or defaming another person or entity. 

Insurance carriers rate your eCommerce business based on WHAT you’re selling, WHERE you are selling, HOW/WHO you are sourcing, and WHICH consumers groups you are selling to (along with many other factors). This “rate” is really a “risk” assessment that an insurance carrier uses to establish how likely your business is to experience a claim. The greater the risk, the higher your premium and deductible is likely to be.