Liability Insurance for Amazon Sellers of Dietary Supplements
You may have received notice that Amazon.com is now requiring liability insurance for Amazon Sellers. Amazon includes a requirement that any policy provided to Amazon be written on an occurrence basis. However, insurance companies that provide General Liability coverage (including Products Liability) for nutraceutical and dietary supplement companies only offer coverage on a claims-made basis.
There are two different types of coverage forms for General Liability policies: “occurrence” form and “claims-made” form. The difference is the coverage trigger. The “occurrence” form responds to a claim that happened during the insurance policy year, even many years after the affected policy period. This form is used for industries whose liability risks are considered less risky. For the nutraceutical and dietary supplement industry, “claims-made” is the only available form due to the perception of higher than average risk to loss. The claims-made coverage only provides insurance under the policy while it is in effect. Generally, there are three dates to determine coverage under a claims made policy: 1) date the claim occurred, 2) retroactive date of the policy, and 3) the date the claim is reported to the insurance company. The claim also needs to be reported as soon as practicable. Other claim reporting conditions may apply depending on the policy conditions.
For further discussion of General Liability coverage for nutraceutical and dietary supplement businesses, and occurrence coverage versus claims-made coverage, please see our article “Liability Insurance for Dietary Supplement and Nutraceutical Companies.”
We have been providing Certificates of Insurance to Amazon as proof of liability insurance for our dietary supplement clients. These Certificates of Insurance indicate that liability coverage is written only a claims-made basis. Thus far, our clients have been successful with having Amazon accept these modified requirements.
Additionally, we have helpful resources available if Amazon does not accept your current insurance coverage.
If we can assist your business with Amazon’s insurance requirements, please contact us here.