How Much Does It Cost to Get Insurance for Sellers on Amazon?

An Amazon seller packages a product to ship to a customer.

As a business owner, it’s your responsibility to make decisions for your business that will set it up for success. This includes choosing the best business insurance coverage.

If you’re looking at your options for insurance because you’re a Professional Seller on Amazon, it’s natural that one of your first instincts would be to ask, “How much does it cost?”

In this article, we’ll talk about how much business insurance typically may cost, what goes into that cost, why having coverage benefits you as an Amazon seller, and how to get it.

How Much Does Business Insurance Cost?

Business insurance is an important purchase to make, and like other big purchases, such as a car, it isn’t easy to give a definitive amount.

That’s because every online retailer has a unique business, and the business insurance coverage that owners choose needs to protect them from the risks they specifically face.

According to its Terms of Service, Professional Sellers on Amazon who make more than $10,000 per month in sales are required to carry general liability insurance (also referred to as commercial liability insurance). This coverage can help protect online business owners from risks such as:

  • Product liability
  • Advertising injury
  • Third-party accidents
  • And more

The cost of a general liability insurance policy will differ for each online business owner, depending on:

  • Their location
  • The size of their business
  • How long they’ve been in business
  • And more!

Fortunately, Simply Business offers general liability insurance policy options starting as low as $25.25/month*

We’ll review how to go about comparing your coverage options later in this article, but first, let’s look at the benefits included in general liability insurance.

4 Benefits of General Liability Insurance for Online Retailers

If you have a Pro account with Amazon, there’s a reason they want you to have general liability insurance. After all, did you know that over half the businesses on Amazon are small- or medium-sized?

Ensuring you have general liability insurance for your online store is one way Amazon makes sure its sellers are protecting themselves. Once you purchase an insurance policy, it may be easy to forget it exists.

But similar to car insurance or health insurance, if you end up needing general liability insurance, you’ll likely be glad you have the coverage. Here are some of the ways it could benefit your online business:

1. It protects against product liability claims.

One of the main reasons that Professional Sellers who make more than $10,000 in sales per month are required to have general liability insurance is to protect themselves against product liability claims.

Product liability claims come about when a customer sues the seller or manufacturer of a product, claiming they’re at fault when it doesn’t work as advertised.

You may think that you take every precaution and that something like this would never happen to your business.

Let’s look at a product liability case example.

Say you make homemade spa products. A customer buys a sugar scrub from you and complains that one of the ingredients caused them to have an allergic reaction. However, you hadn’t listed the particular ingredient on the product.

As a result, your customer sues you for the cost of their medical bills. This is where the product liability component of your general liability insurance coverage would come into play. With a liability policy, you could be covered for the cost of your customer’s medical bills, as well as legal fees, up to your coverage limit.

If a customer sues you for product liability and you’re found not at fault, you still may incur legal fees. Having an insurance policy with product liability coverage could help to cover those fees.

Having coverage could mean that rather than taking that money out-of-pocket, you can save it to contribute to your online business’s future.

2. It helps protect against advertising injury claims.

You may have noticed as an online business owner that reviews and comments on social media platforms can make an impact on your success.

When you’re running a business, words matter. How people interact with your company and talk about your product can serve you well, but it also could lead to drastic drops in sales resulting from negative comments about your product.

Having a general liability insurance policy that covers incidents like advertising injury claims is important.

Advertising injury incidents include:

  • Libel/slander
  • Copyright infringement
  • Alleged stolen ideas
  • And more

Fortunately, a general liability insurance policy covers incidents like the above, and in the event you need to utilize your business insurance plan, you’ll be glad you have coverage.

Let’s look at a few examples of businesses that could face advertising injury claims:

An online vintage toy store is being sued for libel by a competitor who claims they left a comment on their website that caused their sales to plummet. Without a policy that covers advertising injury, the online toy store owner may have to pay out-of-pocket fees, in addition to potential legal costs.

Finally, an online used bookstore is getting sued for copyright infringement by a competitor with a similar company name and brand. The online bookstore owner wants to defend themselves, but is still getting the business off the ground.

They don’t have the money for extras, and certainly not for a lawsuit. Unfortunately, they don’t have an insurance policy for online sellers with advertising injury coverage.

All of these online business owners may be making their living selling different products, but they all have one thing in common: they could benefit from having business insurance.

With a policy protecting them from advertising injury claims, these online business owners could be covered for costs resulting from the claim, including legal fees, up to their policy’s coverage limit.

3. It can help cover legal costs.

What happens if an online business owner without general liability insurance gets sued and is found not at fault? While they may be happy about the outcome of the case, it’s likely they’ll still owe legal fees.

And legal fees, like anything else, can add up. On top of the initial fee, other costs can easily be tacked on to the final bill. Legal fees can include large sums that for some business owners, could be devastating.

Fortunately, when you have a business insurance policy, not only do you have coverage against incidents such as product liability and advertising injury, but you also typically have coverage for legal fees, up to your policy limit.

4. It builds trust with customers and vendors.

We spoke to how seemingly small things, like comments, can have a lasting impact on your business. And when it comes to building trust with your customers and vendors, having general liability insurance for your online store may go a long way.

Showing proof of insurance with a Certificate of Insurance (COI) is one way to prove to potential customers and vendors that you take your online business seriously. With proof of an insurance business policy, they can feel at ease regarding potential risks and proceed to working with you.

Amazon requires its Pro business owners to add Amazon to its “additional insured” on the COI. An “additional insured” is a party who wasn’t involved in the original policy but that the insurance carrier acknowledges they will now cover. You can refer to the Terms of Service linked above for information on the specific language to use.

As an online business owner, anything we do to boost our credibility and reputation can help to boost business, which is why showing proof of business insurance coverage is a smart step to take.

How to Find General Liability Insurance

Getting coverage with all of the above benefits sounds like a no-brainer, right? Some business decisions can take time and energy away from running your online business.

Fortunately, although finding the right general liability insurance coverage for you is important, it won’t take resources away from your other priorities. At Simply Business, we make it easy to find a general liability insurance policy that fits your needs and Amazon’s insurance requirements, all in less than 10 minutes.

By shopping for your online business insurance with Simply Business, you can:

  • Choose from fee-free monthly installment plans and $0 deductible plans, so it won’t break the bank to get started.
  • Find general liability policies that default to coverage of $1 million per occurrence/$2 million dollars aggregate, which is higher than Amazon requires.
  • See how our ecommerce insurance for online retailers is competitive with other insurance companies; we’ll show you the best price for a policy with the nation’s top carriers.
  • Adding Amazon to your COI as an additional insured is something we also can take care of for you.

We know that not every business faces the same risks, so we make it easy to compare custom quotes for free.

The best part? We have general liability insurance coverage starting for as low as $25.25/month*. Get started getting your coverage here.

Get Insured in Under 10 Minutes

Get an affordable & customized policy in just minutes. So you can get back to what matters: Your business.

The Cost of Business Insurance Is a Price Worth Paying

As an online business owner, sometimes it seems like life can become a list of costs and fees. Paying attention to where your money is going is the responsible thing to do, so it’s understandable you’d want to understand what goes into your premium cost, as well as the benefits it brings you.

As a recap, business insurance costs may vary, depending on your location, business size, business age, and more.

The cost of a general liability monthly premium with Simply Business can start as low as $19.58/month*. That means for less than the cost of a tank of gas, you could protect yourself and your business from thousands (or millions) of dollars in debt — not to mention time and energy you could spend on claims.

We hope this article showed you that despite the cost of your online business insurance, it’s an investment well worth its weight!

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on July-September 2023 data of 10% of our total policies sold.

Allison Grinberg-Funes

I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself – I’m a freelance writer and yoga teacher – I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).

Allison writes on a number of topics such as small business leadership, business structures, and employee training.