How much does Amazon seller insurance cost?

Whether you’ve hit the revenue threshold at which Amazon requires you to get Amazon seller insurance, or you just want to be on the safe side and take out a policy anyway, you’re probably wondering how much a policy is likely to cost you. 

As with most things in life, there is no one-size-fits-all answer. But by understanding which factors insurance companies use to calculate your premiums, you’ll be less likely to pay over the odds for your insurance. 

Let’s jump in and find out how Amazon seller insurance costs are typically calculated.

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Cost Factor 1: Revenue

Fundamentally, all insurance costs are a measure of risk. When the insurance company issues you a policy, it is accepting the risk that one of your products may malfunction or be defective, and could cause personal injury to one of your customers, or damage their property. If that were to happen, the insurance company will have to foot the bill for compensation, medical fees and / or legal fees. 

It stands to reason that the more of something you sell, the higher the risk that something will go wrong. Think about it this way: a one-in-a-million chance accident is extremely unlikely to happen if you just sell one unit of your product, but if you sell a million, it’s almost certain to happen. 

The easiest way to assess how much you are selling is to look at your revenue. As you know, the more you sell, the higher your revenue is, so revenue is a handy stand-in for units sold. Therefore, the higher your revenue, the higher the risk to the insurance company, and the higher your premiums will be. 

Cost Factor 2: Product Category

Risk isn’t only dependent on how many items you sell. Some products are inherently far more dangerous than others. Drivers are required to take out car insurance, for example, because cars are a far more dangerous mode of transport than walking. 

Typically, insurance companies won’t look at every single item in your shop. Rather, they’ll assess which categories your products fall into. Kitchen equipment, which can cause cuts, burns, and crush injuries (think of a heavy pot falling on a hand or foot!), will carry a higher risk factor than quilts or stuffed animals. Jewelry will be in a lower risk category than electric scooters. 

Traditional insurance companies aren’t always great at assessing category risk for Amazon stores, which tend to have products from a wide range of categories all in the same store, so be sure to get a quote from someone who understands eCommerce. 

Cost Factor 3: Location

Although a lesser factor, location can have an impact on insurance premiums. Specifically, sellers on who are located in the United States and are selling worldwide typically enjoy lower premiums than sellers located overseas. 

Conversely, if the majority of your sales are to customers on the US mainland, your premiums may be higher than if your customers are elsewhere, like the UK, because the cost of settling a claim is likely to be higher in the USA due to legal and medical fees. 

What’s certain is that, as an eCommerce seller, your customers will be far more spread out than a brick and mortar shop that sells only to its local community, which can confound insurance companies. 

Ultimately, the impact of location will depend on your specific circumstances, but it’s best to be aware that this factor can affect premiums.

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So, How Much Can You Expect to Pay?

Ok, let’s talk ballpark figures. 

Let’s assume that you score as low risk across the board, on revenue, product category and location. For example, you sell throws, rugs, and other household soft furnishings with an annual revenue of under $100,000, and you’re based in the United States. In these circumstances, a premium quote of around $350 a year sounds about right. 

Conversely, let’s assume the opposite: you sell fire-spitting juggling knives and make upwards of $5 million in revenue annually. In that scenario, your premiums could run into the thousands annually. 

If you’re looking for insurance for the first time, however, you’re likely to be operating at an entry-level, having only just launched your Amazon store. A beginner seller with a low-risk product and low revenue can find quotes as low as just $300 a year if you know where to look. 


Get a quote from Spott today and find out how much you could be saving on insurance.


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