Most first-time bulk buyers budget for product cost, freight, and marketplace fees – and don’t think about insurance until a marketplace requires it or something actually goes wrong. For anyone reselling wholesale inventory, especially on Amazon, liability insurance isn’t optional paperwork; past a certain point it’s a platform requirement, and even before that threshold it’s protecting you against a real, if uncommon, risk.
When Amazon Actually Requires It
Amazon requires sellers to carry liability insurance within 30 days of exceeding $10,000 in gross proceeds in sales in any one month. The required coverage is Commercial General Liability (CGL) insurance with minimum limits of $1,000,000 per occurrence and $1,000,000 in aggregate, covering bodily injury and property damage, with “Amazon.com Services LLC and its affiliates and assignees” named as additional insureds on the policy. Sellers can also meet this requirement by combining a smaller CGL policy with umbrella or excess liability coverage. This isn’t a one-time checkbox – Amazon can request proof of coverage at any point once you’re past the threshold.
Update: starting November 2, 2026, this $10,000/month threshold no longer applies if you sell in one of Amazon’s “enhanced safety” categories (children’s products, cosmetics/ingestibles, lithium battery products, and several others) – see our full breakdown of the enhanced-safety insurance rule to check whether it affects you.
What This Coverage Actually Protects You From
Commercial general liability insurance covers claims of bodily injury or property damage tied to your products, and product liability – the piece that matters most for resellers – is typically bundled into the same policy. In practical terms: if a product you sold is later found to have caused injury or damage, this is the coverage that responds, rather than the claim coming directly out of your business’s cash. This exposure exists regardless of whether you manufactured the product yourself or bought it wholesale to resell – as the reseller, your business can still be named in a claim.
Why It’s Worth Having Before Amazon Requires It
The $10,000-per-month threshold is a platform rule, not a description of when the underlying risk actually starts. A defective or mislabeled product can create liability exposure at any sales volume, and a batch with a genuine quality problem is a real risk regardless of how carefully you screened it for authenticity going in. Waiting until you’re required to carry coverage means operating without protection during exactly the period when you’re scaling fastest and have the least cushion to absorb a claim.
What It Costs
Typical CGL premiums for sellers run in the range of $500 to $1,000 annually, though some providers offer entry-level policies starting closer to $300 per year, and a few offer pay-as-you-sell pricing starting around $26 a month for sellers who prefer to scale coverage cost with sales volume. Whatever provider you choose, Amazon’s policy requirements call for an insurer with a financial strength rating of at least S&P A- or AM Best A-, a maximum $10,000 deductible, and at least 30 days’ notice of cancellation – details worth confirming before you buy, since a policy that doesn’t meet these specifics may not satisfy the actual requirement.
Other Coverage Worth Knowing About
General liability is the foundation most wholesale resellers start with, but a few other coverages are worth understanding as the business grows: commercial property insurance protects inventory and equipment at wherever you store stock before it ships, and inland marine or cargo coverage protects goods actually in transit – relevant if you’re managing your own freight rather than relying entirely on a supplier’s shipping. Neither is usually required at the level Amazon’s CGL requirement is, but both address gaps a basic liability policy doesn’t cover once inventory volume and storage complexity grow.
Wholesale Distributors US ships from verified, authentic inventory sources so you’re not adding unnecessary product liability risk on top of your own – apply for a wholesale account to see current terms.
FAQ
Do I need insurance to sell wholesale products on Amazon?
Amazon requires liability insurance once you exceed $10,000 in gross proceeds in sales in any one month, giving sellers 30 days to obtain a qualifying Commercial General Liability policy. Many sellers choose to carry coverage earlier since the underlying product liability risk isn’t tied to that specific sales threshold.
What type of insurance does Amazon require sellers to carry?
Commercial General Liability (CGL) insurance with minimum limits of $1,000,000 per occurrence and $1,000,000 in aggregate, covering bodily injury and property damage, with Amazon named as an additional insured on the policy.
How much does seller liability insurance typically cost?
Most sellers pay $500 to $1,000 annually for a qualifying policy, though entry-level options start around $300 per year and some providers offer pay-as-you-sell pricing starting near $26 a month.
Related reading: How to Spot Counterfeit Wholesale Products | Wholesale Purchasing Startup Costs | Resale Certificate Guide for Wholesale Buyers | Amazon’s Enhanced-Safety Insurance Rule: No More $10K Threshold for These Categories
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