I Bet You Are Breaking The Rules – Insurance

Let’s start with this. Here is a screenshot from Amazon’s seller agreement. The entire page can be viewed here.

Screen Shot 2015-12-28 at 4.27.45 PM

Did any of you realize that you have to carry an $1,000,000 policy to be a seller on Amazon!?

My guess is that 1 out of every 10 of you did.

9 out of 10 of you are freaking out right now. 

Here’s the deal. There is no reason to freak out. Amazon doesn’t police this rule as much as they police other rules such as product listings and such.

I didn’t carry insurance for my business until a few weeks ago. I’m not kidding.

I always heard that you needed to, but I could never find anyone who could provide me with this kind of coverage.

My brother, Nick Wilkey (this link will now take you to Ashlin Hadden, my new recommendation since my brother has gone full time into FBA), decided to use me as an experiment. Nick work in the insurance world and is also an Amazon seller (I may have taught him a thing or two). He wanted to find out which companies would be willing to offer an insurance policy to me as an online seller. After a few months of research, presentations, etc, Nick actually found 2 companies that were willing to work with Amazon sellers on this type of policy.

Finally! I could actually sleep easy at night.

Why is insurance so important for us as Amazon sellers?

  1. If you do not have your business registered as a corporation, a lawsuit against you could actually be paid using your own personal assets (aka – cash, house, car, etc). Partnerships and sole proprietorship have a different legal structure and technically aren’t an entity of their own (please consult a lawyer for an exact clarification).
  2. Without it, you are breaking the rules. We all know how that turns out (if you don’t, start reading here).
  3. Just because we don’t physically see the end user of a given product, we are still liable for it. It is a little crazy, but that one class in business law taught me a lot.
  4. Here are a few examples of recent lawsuits.
    1. http://www.law360.com/articles/712171/amazon-gnc-others-sued-over-workout-supplements
    2. http://www.pulseheadlines.com/wen-hair-care-products-hair-loss-collective-lawsuit-filed/13056/
    3. http://www.nbcnews.com/news/us-news/mom-sues-u-pennsylvania-amazon-over-daughters-suicide-cyanide-n422046
    4. http://consumerist.com/2015/03/06/father-of-teen-poisoned-by-caffeine-powder-files-lawsuit-blaming-his-death-on-supplement-makers-amazon/

So instead of telling you that you all need to run and get insurance ASAP (which is a little crazy), I’m going to bring my brother on to a Blab (online streaming video) for a little live Q & A.

Here is the info you need to know:

Show Date: 1/6/16

Show Time: 8 p.m. EST

Show Link: Click here

If you want to contact Ashlin, please reach out to her via (this link will now take you to Ashlin Hadden, my new recommendation since my brother has gone full time into FBA):


Email to [email protected]


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