Amazon FBA insurance with Peter Heibloem - a podcast by Michael Veazey

Protecting your assets with Amazon FBA insurance is one of the best things you can ever do for your business. Find out in today's episode with Peter Heibloem.



Peter Heibloem is the CEO of Online Sellers Insurance.

Insurance and risk

“If you want to make serious money, you’ve got to get serious.”



You’ve got to get serious about protecting your asset along the way with Amazon FBA insurance. 



Legally if you put your brand on products, and selling it in other countries,  you are deemed to be the manufacturer!

What are you insuring against?

Personal injury or property damage are the two categories of risk we are looking at really. 



These are the main risks. 

Amazon TOS

It’s a requirement to “hold Amazon harmless” under Amazon’s Terms of Service. 



In August 2019, there was a new “business agreement” which Amazon is enforcing on 3rd party sellers.  



The Old rules no longer apply: 



$10K/mo for 3 consecutive months before need insurance 

Professional account holders only. 



Now from day one, there is a Clause that we have to “hold Amazon harmless”.



Amazon has the right to come after us to get their money back. 



Insurance is the best protection against this. 

Lawsuit example

Someone had a product that modified the toilet in some way. 



It leaked and damaged property. 



The buyer filed a claim with their insurance company. 



The insurance company filed a claim with Amazon.  



Amazon then went after the 3rd-party seller!

High-risk Product categories

Yes, demand and competition are important. But you need to consider insurance and risk as a factor. If you have a shortlist of 2-3 products, bring in the insurance issues around that to help you make a final decision. Especially if you are not very knowledgeable in the niche. 



These days insurers can be scared of risk in selling in America or Canada. 



Premiums might be $5000-6000 AUD. However, now Peter has educated insurers, the insurers can now offer premiums of $2000 AUD for similar products. 

Amazon’s due diligence reduces insurers’ anxiety

Insurers might initially see Amazon as similar to Gumtree. 



But there are burdens of proof to even open an Amazon account, and more to get approved for a category in Amazon FBA insurance.

Filtering  product selection by insurance risk

There are no tricks!



The more compliance required the harder to get started - eg getting the product tested to get a report. However, this is a great way to look at putting a moat around your business. If you find it hard, so will other potential sellers. Many of them will just move on. That’s potentially your opportunity. 



There are some obvious risk differences too. 



Butter knife vs. A pocket knife is obviously different. 



Electrical goods clearly carry some more risks. 



People tend to sue for things related to Baby. For that reason, there are a lot of safety standards that Amazon has before they let you sell some kinds of items.



All insurance policies say that the seller needs to meet the minimum requirements of the state.



 A simple google search of product safety standards with your product can do that. 



CPSA.gov 

Instructions

Make sure you have correct instruction manuals for Amazon FBA insurance: 



* Packaging, safety manuals, etc. 

Eg plastic bag without a suffocation warning label and holes punched in -above a certain size (5 inches/12 cm)

Eg 2. -3 M (9 feet) cable for electrical - 1.5 m safety cable (9 feet) 

Further episodes of Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.

Further podcasts by Michael Veazey

Website of Michael Veazey