Amazon has confirmed plans to operate in South Africa in 2024 and has opened seller applications.
While the application doesn’t currently require a seller to have liability insurance, our experience from other markets tells us that it will be required at some point.
Liability cover is important to protect your business against unforeseen liability that can arise in the normal course of operations. Due to the devastating impact a lawsuit can have on your business without the cover in place, we have sourced an easy to take-out all-in-one liability policy called SureThing and SureThing Lite from iTOO, a specialist liability underwriting manager underwritten by Hollard.
*Please note: TCV Africa is not a registered FSP and cannot provide advice on insurance products. TCV Africa is an affiliate of the intermediary and receives referral fees for referring customers. All queries and claims must go through the intermediary on the policy, SureStart Online Financial Services FSP. 47233.
Why do eCommerce Sellers need Insurance?
eCommerce businesses are often left in the dark when it comes to protecting what they have built. No matter what type of eCommerce business you operate, each one comes with a particular set of common risks. Obtaining the right insurance is crucial to protect your business whether you are selling on marketplaces such as Takealot, Makro marketplace, Bobshop, Loot or even your own webstore.
Why do Amazon Sellers need Insurance?
Amazon sellers should prioritise obtaining product liability insurance due to Amazon’s stipulation that they must acquire a policy and submit a Certificate of Insurance after meeting specific sales benchmarks. Moreover, this insurance serves as a crucial safeguard, offering protection to sellers in the event of claims arising from potential damages caused by their products.
What kind of Insurance do Amazon Sellers need?
We expect upon achieving R100 000 in monthly sales, Product liability insurance would be a requirement for Amazon Sellers. If your sales exceed a certain threshold, Amazon mandates the purchase of a product liability policy. Furthermore, sellers might also consider other insurance options to ensure comprehensive coverage against various losses and unexpected situations for their stores.
Liability Insurance is important for an online business for several reasons:
Liability insurance can provide financial protection in the event that your online business is sued for various reasons. Without liability insurance, you may have to pay for legal defense and potential settlements or judgments out of your own pocket, which can be financially devastating.
Liability insurance is a critical component of a broader risk management strategy for your online business. It allows you to transfer some of the financial risks associated with your operations to an insurance provider, helping you mitigate the potential impact of unexpected legal claims or liabilities.
For online businesses, cyber liability insurance is particularly important. It can help cover the costs associated with data breaches, hacking attacks, and other cybersecurity incidents that can result in financial losses, legal liabilities, and damage to your reputation.
In many jurisdictions, certain types of liability insurance may be legally required for specific types of online businesses. Failing to have the required insurance coverage can result in fines or other legal consequences.
Lawsuits and legal claims can be expensive to defend against and can result in significant financial losses. Liability insurance can provide a safety net that helps ensure your business remains financially stable, even in the face of unexpected legal challenges.
Having liability insurance can also build trust with your customers. Knowing that your business has insurance in place to handle common potential issues can make customers feel more confident in doing business with you. It can demonstrate your commitment to their protection and financial security.
Some business partners, vendors, or clients may require that you have liability insurance in place as a condition of doing business with them. Having insurance can open up opportunities for partnerships and collaborations that might otherwise be unavailable to your online business.
See below Insurance offering for eCommerce & Amazon Sellers :
SureThing Lite meets the minimum requirements of the anticipated liability limit for Amazon sellers at R450/month.
SureThing provides additional cover over an above the anticipated minimum liability limit for Amazon sellers at R1000/month.
Frequently asked questions
Product liability insurance is a must-have for Amazon Sellers. If your sales exceed a certain threshold, Amazon mandates the purchase of a product liability policy. Furthermore, sellers might also consider other insurance options to ensure comprehensive coverage against various losses and unexpected situations for their stores.
Amazon states that individual seller accounts are not required to have insurance. However, insurance is still highly recommended.
Amazon does not provide coverage for claims. Securing insurance for your Amazon store is the optimal approach to safeguard your business against potential lawsuits.
If not immediately, it will certainly become a requirement based on our experience. Upon achieving R100,000 in gross proceeds in a single month, it becomes a requirement according to your Amazon selling agreement to possess business liability insurance.