Product liability insurance for ecommerce brands

Amazon requires commercial liability insurance at one million dollars per occurrence once a seller crosses ten thousand dollars in gross proceeds in a month. Product liability is part of that general liability policy, not a separate purchase. The policy has to be an occurrence form from a carrier rated A- or better, and you add Amazon as an additional insured before uploading the certificate. You have thirty days from the request to comply, and the deductible cannot exceed ten thousand dollars. Miss the window and Amazon can suspend the listing until a compliant certificate is on file.

Walmart Marketplace requires commercial general liability including product liability at one million dollars per occurrence and two million aggregate. The requirement kicks in once a seller's trailing sales pass one hundred thousand dollars, though Walmart can ask for a certificate earlier. The most important difference from Amazon is the consequence of a lapse: Walmart can inactivate the seller account, not just a single listing, so the whole storefront goes dark until coverage is restored. Name the exact selling entity on the certificate and keep the additional-insured wording current, because an automated system checks it.

It is not a separate policy for most sellers. Product liability is the products-completed operations grant inside a standard general liability policy. When a marketplace asks for commercial general liability, that grant is what makes the policy respond to an injury from a product you sold. The catch is that some packaged business owners policies cap product liability at a low sublimit or exclude ingestibles and cosmetics outright. Read the products-completed operations aggregate and the exclusions before assuming a bundled policy satisfies a marketplace or covers your category.

Two inputs set the number, and you carry the higher of the two. The first is the floor in your largest sales channel. Amazon and Walmart begin at one million per occurrence, while Target and Costco require five million, usually reached with an umbrella over a one-million primary. The second is what a serious claim in your category could cost. Ingestibles like supplements and food carry higher severity than apparel or home goods. Selling one product across several channels also depletes your aggregate faster, which is a reason to raise limits even when a contract does not force it.

Only with a foreign-manufactured products endorsement. As the United States importer of record, your brand is the named defendant in a US lawsuit, and an overseas factory's domestic insurance will not fund that defense. Check the policy for a foreign-manufacturing exclusion, which would void coverage for your primary product source, and confirm the endorsement is in place before you rely on it. It is also worth collecting a certificate of insurance from the manufacturer that names your brand as additional insured, so there is a second policy behind the claim if one exists.

Marketplaces verify certificates on a schedule, so a lapse is caught by an automated system rather than a person. On Amazon, that usually means the affected listings are suspended until a valid certificate is uploaded. On Walmart, the whole seller account can be inactivated, which stops every order at once. Reinstatement is not instant, because the new certificate has to pass the same automated check with the right limits and additional-insured wording. Continuous coverage and a broker who renews before the expiry date is the only reliable way to avoid a revenue interruption that has nothing to do with a claim.