Product Liability

Questions

• Amazon seller insurance requirements — what do I actually need?

  Amazon requires commercial liability insurance — at least $1 million per occurrence — within 30 days of exceeding $10,000 in gross sales in a month, or whenever Amazon asks. That is Section 9 of the Business Solutions Agreement, not any law. The policy must cover every product you list and name Amazon as an additional insured.

• Do you need insurance to sell on Etsy?

  No — Etsy's Seller Policy contains no insurance requirement, unlike Amazon's $1 million mandate. But Etsy's terms leave you fully liable for what you sell, and its Purchase Protection program resolves order disputes, not injury claims. If you make candles, soap, skincare, food, or children's items, product liability is the exposure that matters.

• Does product liability insurance cover software?

  Almost never, and the reason is structural: product liability responds to bodily injury and damage to tangible property, while a software failure typically causes financial loss and corrupted data — which general liability policies treat as neither. Software failures are a tech E&O question. The exception is software embedded in physical products that hurt people.

• Product or general liability insurance — which do I need?

  Usually they're the same purchase. For most sellers and makers, product liability isn't a separate policy — it's the products-completed operations coverage built into commercial general liability. Standalone products policies exist for manufacturers and hard-to-place product lines. What matters is that your policy covers products claims, not which label the coverage wears.