Updates to the Commercial Liability Insurance Program Policy

#1

Effective June 27, 2022, our United States Commercial Liability Insurance Program policy will be updated with the following changes:

- Your policy can include a deductible if (i) your gross proceeds from sales of your products in the Amazon.com store exceed USD 1 million in the last 12 months, and (ii) the deductible is listed on your Certificate of Insurance;

- For single-member LLCs, the insured name can match either your legal entity name or the name you publicly use to identify your business (“trade name,” “doing business as,” or “DBA”);

Go to the ‘frequently asked questions’ section on the Business Insurance page for guidance on how to get commercial liability insurance.

#2

Really? ZERO deductible required? I don’t know commercial liability well, but for most insurance that’s a bad bet to make: utilization goes way up when deductibles go out the window, and rates follow that trendline. Y’know, it’s possible to constantly raise the cost of doing business with you without raising fees, and it’s not like your competent sellers don’t notice that.

#3

We as sellers should already increase prices but Amazon keeps lowering the buy box. Time to talk to our State AGs.

#4

Deductibles on commercial liability are not exactly common. This seems like a loosening of the rules, particularly (admittedly belatedly) for the smaller Individual Sellers with the ability to have either the legal entity or the Amazon DBA name.

And even a loosening of the rules is met with Bad Amazon?

[Moderator Edit: Jim-Amazon removed inappropriate comment]

#5

How can they change the rules on the deductible at this late stage?

People have obtained policies as per the specifics laid out by Amazon a few months ago.

Regarding the deductible " The deductible for any policy must not be greater than $10,000 and any deductible amount must be listed on the certificate(s) of insurance. "

Now the deductible is supposed to be zero unless gross proceeds are in excess of $1 million?

#6

Analogously, if you don’t like the posts in the fora, use another forum. Or are you saying you can complain about something while participating in it, but others should not? “Love it or leave it” doesn’t work for e-comm any better than it works for patriotism.

And I don’t see how “10K deductible to 0 deductible” is loosening the rules. Of course, we’ve already established I’m an idiot, so it must be me.

#7

#8

Freedom of speech has become so limited these days. One cannot express their ideas or thoughts in a public forum without the “You’re not welcomed here”. Look, we are all sellers/business owners here for the good of the customers we serve and our families when we have. To express our ideas/thoughts are just as simple as that. Don’t take it personally but take it as one expressing an opinion.

“The Master Mind, Hill taught, is the pooling of intellectual, intuitive, and creative mental resources, which occurs when two or more people enter a supportive pact to assist one another’s aims. A Master Mind group multiplies the mental powers of all its participants. This is the “secret ingredient,” Hill insisted, that delivers lasting success.” -Napoleon Hill

#9

Other way around, previously no deductible amount was acceptable. If a Seller is high enough sales/volume that Seller is now permitted a deductible. I’ve had commercial/professional/product liability insurance for a very long time, unlike personal home, auto, and health insurance with high utilization commercial insurance generally doesn’t have deductible provisions.

Ignoring your confusion between patriotism and nationalism… Not at all, I’m suggesting that anyone complaining about this loosening of these insurance rules should go sell their wares on Wal-Mart, the insurance clause, of Wal-Mart’s contract is far more stringent than Amazon’s. Honestly, the insurance clause at Amazon is less burdensome than the insurance clauses in most Trade Show and State Fair contracts. In other words, you should get out and experience/live life a little, because you don’t seem to appreciate how good you really have it here.

#10

Previously the policy could have up to a $10k deductible before this change.

#11

Read Section 9 and Insurance Limits of the ASBSA again.

#12

I’m talking about the requirements that Amazon had for this policy.

They were very specific and people bought policies based on those requirements.

I’m not sure why you appear to be disputing that fact.

#13

I don’t recall that, provision. Are you sure? Where was it?

If it is a fact, I’m not recalling it. The ASBSA has not been modified… You were supposed to have insurance for a very long time, and I can’t ever recall contract language that indicated that DBA’s or deductibles were okay.

#14

I do not see any reference to deductible requirements in Section 9. What am I missing?

I do see the following text excerpted from an email I received from Amazon on 9/27/21. Attention to requirement #6.

"What are the insurance requirements?
Your commercial liability insurance policy must meet all of the following criteria:

  1. The policy limit must be at least $1 million per occurrence and in aggregate, and cover liabilities caused by or occurring in conjunction with your business operations, including products, products/completed operations and bodily injury;
  2. The insurance policy type can be either commercial general, umbrella, or excess liability and be occurrence based;
  3. Your insurance provider must have global claim handling capability and a financial rating of S&P (https://www.spglobal.com/ratings/en/sector/insurance/insurance-sector) A- and/or AM Best (https://www.ambest.com/home/default.aspx) A- or better (if S&P or AM best is not valid or used in the country where you are required to obtain insurance, a local equivalent is allowed);
  4. Your insurance provider must give Amazon at least 30 days’ notice of cancellation, modification or nonrenewal;
  5. The policy must name “Amazon.com Services LLC and its affiliates and assignees” as additional insureds;
  6. The deductible for any policy(ies) must not be greater than $10,000 and any deductible amount must be listed on the certificate(s) of insurance;
  7. The policy must cover all sales from products you have listed on the Amazon website;
  8. Your insured name must match the “legal entity” name you provided to Amazon (view your legal entity name) (https://sellercentral.amazon.com/sw/AccountInfo/LegalEntity/step/LegalEntity);
  9. The policy must be completed in its entirety and signed; and
  10. The policy must be valid for at least 60 days from the date of submission."
#15

My thoughts exactly…does this mean every seller that has uploaded a COI that was verified needs to have its policy rewritten to comply with this? And by June 27???

#16

The insurance requirements page has been changed as follows:
“Your policy is only permitted to include a deductible if (i) your gross proceeds from sales of your products in the Amazon.com store exceed USD 1 million during the last 12 months and (ii) the deductible is listed on your Certificate of Insurance;”

#17

Yeah, I saw that. I was taking issue with the assertions by @The_Sawle_Mill that this is somehow a relaxing of the insurance requirements.

#18

That is new information to me. I do not recall seeing that language before, and as you admit, it was emailed. In that case it seems to be a tightening. Having any deductible is not in accordance with the actual Amazon Services Business Solutions agreement. Which you seem to realize.

It isn’t there, ergo it is not permitted, a deductible is a limitation or reduction of policy coverage. In effect a $1,000,000.00 policy with a $10,000.00 deductible is in actuality a $990,000.00 coverage policy. Becasue that is how deductibles work.

#19

Becasue that is how deductibles work.

Your condescension is noted, but it is a gross misinterpretation to infer that because there is no mention of deductibles they are not permitted.

The ASBSA mentions Insurance Limits, which is a standardized term and not the same as actual coverage. A policy with a Limit of $1,000,000 still has a Limit of $1,000,000 whether the deductible is $500 or $500,000.

Unfortunately, we do not have any easy way to confirm what the criteria of the Commercial Liability Insurance Policy (https://sellercentral.amazon.com/help/hub/reference/200386300) were prior to this change, but I suspect they were highly similar to what was included in the email that many sellers received last year.

We do know with certainty, however, that the current policy permits deductibles for some sellers, which indicates that the ASBSA does not, in fact, disallow deductibles.

#20

I’m sorry if you think that is condescension.

Nope, sign up for a State Fair, or large Tradeshow, the contract is always very explicit about coverage limits. Read your actual policy, it is going to clearly explain how deductibles work.