The amount of Canadian sellers on Amazon grows every year, with over 41,000 third-party selling partners on the platform in 2021 (Amazon Canada 2022 Impact Report). Whether you’re thinking of opening up an Amazon storefront or you’re already an established Amazon seller, insurance should be one of your top priorities in order to protect your products and your business. This post will help answer any questions you have surrounding Amazon insurance requirements and help you get started on obtaining coverage for your e-commerce business.
Frequently asked questions regarding Amazon Insurance:
Do I need insurance for my Amazon business? What are the Amazon FBA Canada insurance requirements?
If you have reached Amazon’s threshold of $10,000 in monthly sales, you are required to obtain insurance within 30 days of receiving the notice. Your insurance will have to follow Amazon’s liability insurance requirements, which include:
- Commercial General Liability policy limit of at least $1 million per occurrence and in aggregate
- Obtain insurance from an insurer that is rated A- or better by AM Best
- Give at least 30 days notice of cancellation to Amazon
- Name “Amazon.com Services LLC and its affiliates and assignees” as additional insureds
- Policy must cover sales of all products you have listed in your Amazon store
- Any deductible amount must not be greater than $10,000
- Your insured name matches your “legal entity” name on Amazon
Do you provide insurance for US sales?
Yes, we can provide insurance for Canadian-based Amazon businesses, even if your sales are global, for example from Amazon US. You will need to specify the percentage of sales from each country you sell to when you fill out your insurance application.
What types of insurance do I need to have?
At a minimum, you will want to obtain Products/Completed Operations and Commercial General Liability (CGL) coverage for your business. Depending on where you import your products from and your exposure to cyber risks, you may consider purchasing additional coverage. The brokers at Fuse Insurance will review your business to ensure you are receiving the best protection for your company.
How much does Amazon Insurance cost for Canada-based sellers?
The cost of your insurance will vary based on a number of factors unique to your business. You can’t compare the price of your insurance to another seller because your company could be selling completely different product categories, have different manufacturers and have differing annual revenue. Higher risk products (including anything that goes on your body, is consumable or is made for children) may result in a higher premium. Imported products and private label products have higher liability risks and can also increase the cost of your insurance.
Why should I have $2 million in liability insurance instead of $1 million?
For a couple of reasons, $2 million in liability is the minimum that we offer for coverage. The price of liability claims has increased drastically and $1 million is no longer sufficient for covering most claims. All it takes is one accident for you to end up paying out of pocket for legal fees in the event your business is involved in a lawsuit. This higher limit of insurance coverage prevents any overhead costs from occurring. Our policy limits are provided in CAD, so in order to meet Amazon’s US requirement of $1M USD, we need to have a $2M CAD limit (as $1M CAD is too low with the exchange rate). Further, the premium difference between C$1M and C$2M limits is generally relatively low.
Will the certificate of insurance (COI) name Amazon?
If you work with a broker experienced in Amazon insurance, your certificate of insurance, also known as a COI, will include all the information that Amazon requires. This includes naming Amazon as an additional insured, listing the deductible amounts and giving 30 days notice of cancellation. If those requirements ever change, the certificate of insurance can quickly and easily be updated.
Do you provide insurance for sellers on other online marketplaces?
We provide insurance for all types of e-commerce sellers, whether you use Etsy, Shopify or another platform. We also work with the top specialty insurers across Canada to provide insurance customized to your products.
How do I get started?
Fill out our secure online Amazon insurance application form and select “Amazon FBA and eCommerce” as the business type to get started on your insurance quote. This will ask the exact questions we need to know in order to offer you an indication on pricing and/or quotes. We will be in touch once the form is received, but if you need help along the way, we are happy to answer your questions over the phone at 1-866-387-FUSE (3873) or over email at info@fuseinsurance.ca.
Why choose Fuse Insurance?
We are one of Canada’s leading providers of e-commerce insurance. Our brokerage is 100% independently owned, meaning we can provide you with expert advice and choice from multiple insurance providers. We are a licensed insurance brokerage in BC, AB, SK, MB, NB with wholesale operations in ON and The Maritimes.
Conclusion
The right insurance coverage will give you the peace of mind you need in order to continue selling and scaling your Amazon business. Your annual premium will vary based on a number of factors including the types of products you sell their product risk category and the countries that you sell in. The experts at Fuse Insurance can provide customized amazon insurance packages with coverage that you can rely on. To get started on your insurance today, use our online application form.
