If you are involved in e-commerce by selling online, you might realize that you face similar risks as other business. Those involved in the Amazon marketplace are required by the company to obtain a certain amount of business coverage up to $1,000 per occurrence:
• Commercial general liability insurance
• Bodily injury insurance
• Personal injury insurance
• Property insurance
Amazon vendors need to realize that this is limited coverage that will not protect them if losses necessitate a larger claim. Like any business person, those involved in e-commerce need to assess their needs and acquire appropriate related insurance protection.
General liability insurance is a basic coverage for the online seller – as it is traditional brick and mortar retail outlets. It is there to protect your business from liability to:
If a related lawsuit occurs, this insurance can pay for payment you are judged to pay and legal expenses.
Products liability coverage generally is tied to this policy. It protects the manufacturer or seller in regard to bodily injury or property damage to a third party that occurs because of a faulty product.
There are instances, however, when this form of coverage does not help. Why? In the event a seller is not rated appropriately and files a claim, he or she may get a ‘no’ from the insurer.
Take the case of Mary – an Amazon vendor that successfully sold skin care products to an online market.
All was fine, business-wise, for Mary until the fateful day when a consumer sued her in relation to a serious skin flare-up credited to the creams sent to her by Mary. When Mary filed a claim, she was in for a shock: the insurance company denied coverage because her policy was wrongly rated as an internet retailer. As someone that placed her company labels on her creams, she should have been rated ‘a manufacturer’!
Too bad her agent did not catch the mistake! The financial consequences had a far-reaching effect, eventually forcing her to file for bankruptcy.
While this spells out the urgency of being on the lookout for problems with a policy, there are other forms of coverage that an Amazon seller needs to be highly cognizant of.
Other Policies for the Amazon Seller
One of the chief concerns any Amazon seller has is the possibility of being suspended from the Amazon network of sellers. If this occurs, the loss of income can be substantial. Amazon Suspension Insurance Policy is the number one coverage that is recommended for the industry across the board.
Other insurance policies to consider are:
• Business Auto
• Workers Comp
• Cyber Liability
• Ocean Marine
Of course, nothing takes the place of speaking to an insurance professional that will steer you to a tailored insurance program made for you.