Insurance?

Just had to update my liability insurance the other day and wondered about the process for offshore sellers selling on Amazon US. How do they get insurance to provide Amazon proof of Liability. Are they able to purchase thru US insurers? I remember some sellers on Handmade when it became enforced (Turkey and Russia for example) who claimed it was impossible and or too expensive even if they could. Just curious how that is facilitated.

I assume they used Amazon’s insurance accelerator. I’m sure Amazon thought ahead about their protected class of sellers (overseas sellers) to ensure they wouldn’t lose that precious commodity for them. :roll_eyes:

As far as the expense goes, I don’t buy it. There’s nothing more expensive to insure then what we sell. I have 2 accounts. My slow one, meeting Amazon’s requirements, costs $200 a month. My larger account, that’s also in a distributor that requires $5M is $450 a month.

Most categories on Amazon have annual plans that are less than what we pay a month.

As far as individual countries go. There may be some restrictions. Russia might be a tough one right now. :man_shrugging:

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Some of these sellers initially stated that none of the ones in the Accelerator offered non US sellers. Maybe it changed.

That is very true. Handmade Jewelry sellers pay around $3-350 annually.

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#jealous

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Well, unless they stab themselves with an earwire, the claim rate should be vanishingly small!

I can attest to this. When I first started selling on Amazon, I was based in Hong Kong and it was pretty much impossible to get PLI insurance that would qualify. I opened an LLC in USA solely to get insurance. I would have done that eventually anyway as I moved back to the states but it wasn’t something I really wanted to do at that time.

I doubt if the rules have changed, Amazon wants a US based insurance policy as trying to get an overseas company to pay up for a claim would be problematic. My guess is a lot of overseas sellers go the US LLC route.

Good Luck,

TJB

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Hi!

Offshore sellers here, from Barcelona :slight_smile:

Since 2022 we needed that liability insurance worth $1M. It was very hard to get it to be honest, because all the companies that we inquired refused to insure a foreign company.

We pushed Amazon very hard since they were requesting an insurance that we couldn’t purchase. At the end we received an email address to contact Chubb, an American insurance company that allowed us to be insured.

So, yes, if foreign sellers want, they can have a liability insurance. But to be honest I don’t think that Chinese counterfeit sellers are paying this :rofl:

Sergi

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Valuable info for others! Thanks

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I guess there may be small PRC sellers, at least in Handmade, who may not meet the 10k threshold when selling items less than $10 and if as rumored, they may have multiple accounts all selling under 10k :man_shrugging:

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The real answer here is they probably submit a fake COI.

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Hopefully they do this on occasion.

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Maybe they pay for it, I was just guessing because I think that they have different(better) rules…

I hope that Amazon double check the COI with the insurance companies…

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The problem I see with that is it’s not something that an AI is capable of doing which means it probably doesn’t happen. Amazon also has themselves covered legally if they requested a COI and the seller submitted a fake, so they have little incentive to go the extra mile and verify them all.

The main issue with overseas sellers is they have little incentive to buy insurance since unlike a US business, they can’t actually get sued (at least not easily) if a liability issue arises, so why would they want to spend money to protect someone else? Logically, because of that fact and the fact that an overseas seller likely does NOT have pre-existing coverage (vs many US businesses have coverage outside of their Amazon business), Amazon should be forcing overseas sellers to buy verified coverage through the insurance accelerator program, but as we all know, the rules seem to be less strict for overseas sellers than US sellers.

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I thought there was a list of approved insurance companies. For all we know, there is a verification process set up with the approved companies, much like GS1, where policy #'s, connected to company names can be verified by AI.

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They have some requirements regarding the financial health of the insurer (they have to be a certain credit rating or higher), I never saw a list of approved companies though. The industry has a lot of regulation so there aren’t really “mom and pop” insurance companies anyway.

I don’t have a ton of knowledge about Amazon’s insurance requirements as it’s mostly been straightforward for me but I do know this:

  • They are finicky about what’s on the COI, if you don’t have things like the right addl insureds and certificate holder it will be rejected
  • Sometimes insurance companies will include cover letters or additional information about your policy along with the COI. Do not submit those additional pages as that may confuse the bots.
  • I asked my agent if they’ve ever had Amazon call to verify a policy, they said no.
  • Every COI I’ve ever received for any purpose has always been on an ACORD form, and I think every legitimate insurance company (in the US) issues COIs on those standardized forms. Anything else will likely be rejected by Amazon. (And I’ve seen a post on the seller forums with a fake looking non-ACORD COI that was rejected).
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This has been the industry standard for all COI’s since 1971.

I get your points, and you’re probably right. They aren’t verifying anything.

Amazon’s AI looks for:

  • Company Name and Address Match
  • Insurance Company Name and Address Match
  • Insurance Company name is recognized as one that exists in their database
  • The policy number you entered manually matches what’s on the document
  • The min required $ amount is satisfied
  • They are checking that if your policy is “Occurrence Based”, that you sell in the categories where that type of policy is allowed. Initially it wasn’t and Amazon had to change the rules because apparently they didn’t know how PLI works in this country… :roll_eyes:

Pharmaceuticals.
Nutraceuticals and dietary supplements.
Ingestible products.
Chemicals.
Critical automotive parts.
Children’s consumable products that are not insurable under an occurrence policy form.
Other products deemed acceptable to Amazon for claims made policies.

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Apparently there’s another exception to the occurrence based requirement:

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Wonder what makes France so special and different from other European countries???

That’s a new one

Along with Belarus, Ukraine, and Kazakhstan, and in more ways than just securing insurance - as SEAmod more or less let slip today:

https://sellercentral.amazon.com/seller-forums/discussions/t/fc541a39-69fe-4c1c-935c-3219f59af601?postId=63219b70-8e22-4d1b-ab01-42746dd247a8

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I would imagine insurance for a company where the owners are non-US residents would cost more in general (and depending on where the owners are located the rates may differ, or coverage is harder to get), as a non-US owner has less incentive to do due diligence on their products as if a liability issue arises it’s easier for them to walk away and ignore any legal liability.

As for the ads, I was going to say maybe Amazon’s trying to stay away from things of a political nature, but a search for ukraine jewelry comes up with something VERY controversial as the first sponsored result:

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It’s amazing sometimes what you see people complain about being removed/restricted for petty reasons, and then you look and see what Amazon allows.

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