Amazon Seller News: Updated Commercial Liability Insurance Requirements
Announced recently, Amazon will be increasing the number of sellers who are required to maintain a commercial liability insurance policy for their Amazon business. In this blog, we walk you through the existing requirements, how the new changes will impact you (and when they go into effect), and finally the potential consequences for failing to comply with these updated terms.
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Amazon Insurance Requirements
As of today, Amazon requires commercial liability insurance for any seller doing more than $10,000 USD in monthly sales. Amazon specifies that for these sellers you must have a plan that covers up to $1,000,000 in individual claims. Sellers must acquire this insurance within 30 days of hitting the $10,000 in monthly sales threshold. Failure to do so can result in listing and account suspension that lasts until you can provide proof of insurance registration.
For all sellers who are currently required to be covered by commercial liability insurance you will continue to need it under the new policy. The new policy being implemented by Amazon will only expand the amount of sellers required to have insurance. Starting on November 2, 2026, sellers even below the $10,000 threshold will be required to have commercial liability insurance IF they have products with potential safety hazards.
This includes products targeted at children, products with lithium ion batteries, and ingestible products. A full list of requirements can be found at the link here
The second major part of the updated terms is for sellers based in Mainland China. If you are a seller based in Mainland China and are required to obtain insurance based on the above reasons, you are now required to obtain that insurance through the Amazon Insurance Accelerator program. Amazon says that the reason for this is insuring that all products are properly insured up to the company’s standards.
Amazon Appeal Submission
For sellers who fail to comply with the new terms and do not acquire an insurance plan, you will likely need to navigate the Amazon suspension appeal system. Amazon handles suspension appeals primarily through the creation of Plan of Action (POA) appeal documents. These are documents which consist of three written sections and support documentation for your claim to reinstatement.
The first section of a POA is the root cause analysis, discussing the reasons you believe led to your account or products being suspended. In this case, this would discuss failing to acquire commercial liability insurance. Next is the immediate correct actions section, where you can discuss what you have done to address your suspension in the immediate aftermath. For this, you would likely discuss how you went about acquiring an insurance plan and its details. Finally, you should discuss any future preventative measures you are taking in order to avoid future account health actions.
The goal in a POA is not just to prove your innocence or your compliance with Amazon’s policy, it is to show Amazon that you are a seller they want to have on the platform. At Amazon Sellers Lawyer, our team has extensive experience both preparing these documents and convincing Amazon to reinstate sellers. This is because our team includes former Amazon employees who used to work on the enforcement team. They know the requirements they were given before reinstating accounts, and now use that knowledge to help sellers get reinstated. Learn more about Amazon account suspension appeals
Contact Amazon Sellers Lawyer Today!
At Amazon Sellers Lawyer, we are constantly staying on top of the ever-changing e-commerce landscape. This includes monitoring changes to policies for the major e-commerce markets, including Amazon, Walmart, and more. Our team is prepared to help you deal with challenges that arise from these changes, and from the general challenges that pop up from operating an e-commerce business.
If you are alerted to a suspension on your products or account, give us a call today! We can be found online here, or give us a call directly at 212-256-1109.
About the Author
CJ Rosenbaum, Esq.
CJ Rosenbaum is the founding partner of Amazon Sellers Lawyer. He’s been practicing law since 1995, and since 2016 his firm has focused exclusively on helping Amazon sellers deal with issues like suspensions, intellectual property disputes, and withheld funds.
CJ has written seven books on Amazon seller legal issues including the Amazon Sellers’ Guide to Copyright Law. He has spoken at major industry events like the Prosper Show, Global Sources Summit, Retail Global. CJ also works with the Amazon Sellers Lawyer team to provide free content for Amazon sellers. This is available through their online blog and YouTube channel, frequently covering major Amazon updates and important topics relevant to the seller space.
Through BrandProtectionAmazon.com, the firm also supports brands in protecting their products. This gives the team the unique opportunity to learn from case wins on both sides of the fence, strengthening protection for both the sellers and brands that Rosenbaum & Segall P.C. represents.
Amazon facing new insurance requirements or an account suspension? Amazon Sellers Lawyer helps sellers navigate suspension appeals and account reinstatement cases. Contact us to discuss your situation and determine the best path forward.