Amazon Insurance Accelerator
Amazon Insurance Accelerator. All Amazon sellers are required to carry product liability insurance at the very least. However, Amazon isn't the only platform; many others require US sellers to have product liability insurance; the difference-maker, though, is that Amazon is working to make it easier.
As of late, Amazon is working with Marsh, an insurance brokerage, to build a new digital insurance network called the 'Amazon Insurance Accelerator.' The so-called "accelerator" will enable small businesses selling products on Amazon to purchase product liability coverage. But what can sellers who hit 10k in sales expect? That's what we'll examine in this article.
What is the Amazon Insurance Accelerator? This program helps Amazon sellers get the product liability insurance they need to insure their products sold on Amazon.com against bodily injury or property damage.
Below are some answers to commonly asked Amazon Insurance Accelerator questions:
- How Will The Amazon Insurance Accelerator Work?
- Why Do Amazon US Sellers Need Insurance?
- Is Amazon's Insurance Network Is A Good Idea?
How Will The Amazon Insurance Accelerator Work?
As of late, Amazon requires that third-party sellers have product liability coverage after they have reached $10k in sales a month instead of what was previously three months. However, seeing as how many sellers may not know where to go for commercial insurance, the company (Amazon) has set out to help sellers secure insurance.
Amazon Insurance Accelerator is primarily a curated panel of insurers that work with small businesses to secure digital insurance. The accelerator will speed up the process for sellers to apply for and get approved for product liability insurance in particular.
US-based sellers on Amazon will be able to get quotes and then purchase a policy that fits their business's needs the best. Participating insurers will all meet Amazon's requirements by default. That way, sellers don't have to vet each insurer to figure out if Amazon will approve those insurance policies or probably try to find so-called "gotchas" in the fine print.
Participating insurers include Harborway Insurance with policies underwritten by Spinnaker Insurance Co., Chubb, Travelers, Liberty Mutual Insurance, Hiscox, and Markel. All companies have pledged to make policies available digitally by NEXT Insurance, Simply Business, Inc and Bold Penguin.
Why Do Amazon US Sellers Need Insurance?
It is a question that many new to selling on Amazon often ask. After all, Amazon does not require sellers in other countries to have product liability insurance. However, some nuances require businesses, even those selling online, to have some form of protection, especially from being sued.
The product liability insurance policy allows sellers to focus on selling, knowing that if there is an accident caused by their product that leads to property damage or physical harm, the policy has them financially covered.
As identified by Amazon earlier before setting up Amazon Insurance Accelerator, the problem was finding the right policy, especially for new small businesses or start-ups. Amazon's program makes it easier for these relatively new sellers, with little history of selling online, to get quotes, often competitive from those who are part of the program.
The upside for sellers is that they don't have to jump through hoops trying to find an insurer to cover them. Many small businesses will attest to the fact that outside of the Amazon Insurance Accelerator program, trying to find a policy is highly challenging. Furthermore, the hope is that sellers may also be able to benefit from competitive premiums since multiple insurers are perceivably competing within the ecosystem.
Is Amazon's Insurance Network Is A Good Idea?
It was known amongst those in the insurance industry that Amazon was creating an insurance network and implementing a new policy. The new policy, which should have rolled out as of this writing, covers shoppers in the event of injuries or damage claims for up to $1000.
Marsh is one of Amazon's most trusted insurance providers, along with others that the company has vetted. However, insurers aren't obligated to offer insurance coverage to every seller that applies. Insurance companies are allowed to do their due diligence and evaluate risks before extending coverage to sellers. On the other hand, sellers are in no way required to use an insurance company within the Amazon Insurance Accelerator network.
As a seller, you can get a business insurance policy for any other external insurer. If you do business offline too and want additional coverage, seeking a policy from a provider outside of the network may be a better idea.
The Future of Business Insurance
Amazon might be one of the biggest online marketplaces, but it isn't the only one. In fact, there are many others, some of which are growing at a tremendous pace in America, with hundreds of participating American businesses. Moving forward, many of these businesses will require that sellers have some form of business insurance, particularly product liability insurance.
The future of product liability insurance is mainly online, as an increasing number of businesses start selling their products either via online marketplaces, on their website or both. Product liability insurance protects the seller from potential lawsuits which could take a financial toll on the company.
Many businesses shutter under the financial pressure of a single lawsuit, making having product liability insurance important, not only if you're selling on Amazon.
Amazon Insurance Accelerator - The Bottom Line
The Marsh and Amazon partnership to forge the Amazon Insurance Accelerator program is a sign of things to come in the online marketplace space. If anything, it is a welcome addition not only for people who buy products online but also for sellers who don't want to get hammered by a lawsuit.
The platform makes it possible for any seller to get quotes from multiple insurers and choose one that offers the best deal. All of this can be done in a matter of days and almost entirely online. However, some sellers depending on their products, may have to pay a higher premium.
We also strongly advise that sellers don't wait to hit the $10k in sales a month target to get product liability insurance. You should be covered by insurance as soon as you open a shop online, similarly as you would offline.
That way, regardless of what happens, you don't have to worry about a financial fallout affecting your business. Amazon's change in policy is a clear indication that it wants small businesses to be insured for their good and the good of the platform's millions of buyers.
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Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:
Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.
Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties
Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.
Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.