Originally published on August 16, 2019, updated June 4, 2020
eComEngine Industry Liaison Liz Fickenscher sat down with Ashlin Hadden to talk about Amazon sellers and insurance. They covered:
Watch the video above and visit Ashlin Hadden Insurance to learn more!
Liz Fickenscher and Ashlin Hadden discussed what merchants need to know about Amazon seller insurance. Hadden was working as an insurance agent for Liberty Mutual when she got into the business of eCommerce insurance.
One of her Home & Auto clients approached her and asked if she could help him secure a policy as an FBA seller. She didn’t know anything about Amazon, but she decided to do some research and learn the industry. Today, she runs a very successful agency providing guidance and insurance products to Amazon sellers.
Confused about commercial liability? Don’t worry — you’re not alone! As Fickenscher explained, there’s been some confusion due to some changes made in Seller Central. So what’s the deal? Does everybody have to have it now?
Hadden’s answer is pretty clear - YES! The new rule is that it is required in the terms of service for Pro sellers. While this hasn’t been enforced so far, she believes that sometime in the near future, Amazon is going to require sellers to prove their coverage - or face suspension.
As Fickenscher said, it’s better to be proactive. So if you don’t have commercial liability insurance coverage for your Amazon business, now’s a good time to get started.
Are Amazon sellers required to have product liability insurance? Not according to the terms of service. However, as Hadden explains, it’s not much more expensive when bundled with general liability insurance. Product liability is a good idea to protect sellers and customers in the event of a product defect, for example.
Contrary to what some believe, you don’t have to be the manufacturer or a private label seller to be held accountable for problems and injuries stemming from defective products. While you may not be liable for millions of dollars in damages, you may still have to defend yourself in court. “A $500 insurance could versus a $30,000 bill for attorneys — I’d just buy the policy,” says Hadden. “If you’re going to be a business, act like a business.”
Many of Hadden’s clients have left full time jobs to focus solely on their eCommerce businesses. This can make it difficult to keep health insurance. To address this need, she has created an association so that sellers get a group rate. Now, you don’t need to stay tethered to a job you hate in order to keep benefits!
Another innovative type of coverage offered by Ashlin Hadden Insurance? Coach/Guru policies. If you have a YouTube channel or Instagram following, and you offer tips or advice, you may want to look into this. If one of your fans ends up in a bad situation as a result of something you’ve said, you could be protected.
Don’t put your business at risk. Watch the video to learn more!
Liz: Hey everybody, it's Liz from eComEngine. It's Friday morning. I'm here with Ashlin Hadden from E-Com Insurance, right?
Ashlin: Ashlin Hadden Insurance, yeah.
Liz: Yep. She's kind of the queen of E-Com insurance and she was nice enough to meet with me this morning. It's a Friday. Everybody tries not to have Friday meetings, but here we are. Ashlin everybody knows who you are. But tell me a little bit about how you got into this business.
Ashlin: Yeah, so I kind of fell into the eCommerce world. I was an agent for Liberty Mutual and I was doing more of like the home and auto and your normal like mom and pop shops and your corner cafes. One of my current clients on the home and auto side came to me and said, "Hey, I'm a FBA seller and I'm going to need insurance." And I'm like, "What the heck is FBA?" And he's like, "Well, let me tell you about it."
Ashlin: He sat down and talked to me about it and I'm like, "Jason, I have no idea what this is. I have no idea who would do it. Most insurance carriers don't like online retailers. I just don't think it's worth my time. I'm sorry I can't help." He came back again a couple of weeks later and he's like, "No, Ashlin, like, seriously, I need you to do this for me." I went out on my own, opened my own agency and I started talking to some carriers and they, again, I'm not interested. I don't like eComm, that kind of thing.
Ashlin: I kept digging in, digging, and digging and finally found a company that would work with me and give it a shot and try a couple policies. I got him the policy and he came back and he's like, "Hey, I run this Facebook group and there's like 15,000 of us in here that are going to need this policy." So I'm like, "Maybe it's worth my time now." It was kind of just on a whim. Then I got into this community and just completely fell in love with the craziness, the just competitiveness but competitive where you still want to help each other. Then I started to going to conferences and getting asked to speak at conferences and it just became my baby.
Ashlin: I just fell in love with the community of eCommerce and the FBA sellers and things like that. So it kind of transitioned from going in this like mom and pop shop and auto home and life insurance into focusing on the eCommerce and how I can protect eCommerce sellers. Even their home and auto, I can still do that. But then all of their other stuff, their auto and their commercial auto, their personal liability, their product liability, all of that stuff, was just kind of on a whim.
Ashlin: But I'm absolutely in love. This is my passion. I eat, sleep and breathe Amazon like everybody else now. I wake up in the morning and instead of checking my Facebook or checking my iPhone to see if I'm suspended. I get on like, okay, what's the news of Amazon today? What's going on? So it's been amazing and it's been crazy ride for the last four years, but I'm absolutely in love with eCom and all of these crazy sellers.
Liz: I think they love you too. So let's get to the million dollar question. There's been some confusion in Seller Central. There was a page that said that pro merchants who sell on Amazon must provide proof of commercial liability insurance. For a while there was like a cap. You had to sell a certain amount in order to require that type of insurance. Then all of a sudden there was a page that didn't have a dollar amount on it. What's the deal with that? Does everybody have to have it now?
Ashlin: Yeah. That was the old rule. The 10,000 for three consecutive months was the old rule. The new rule is any pro seller. So if you're paying the, was it 29.99 a month?
Ashlin: If you're paying the 29.99 a month, it is required for the terms of service. Now, we all know that Amazon isn't policing that now, but there was a new rule that came down in the last six to eight weeks in California. That whole new terms with Amazon, that in that terms, it does say that Amazon is now going to start requiring it and they're going to start looking at it every single year.
Ashlin: You're going to have to show them proof that it's active. We feel like we've been predicting this for the last two years, but we feel like with this really, now in California, you're going to have it start doing it every single year. That's our job as the broker to provide that to Amazon. But we think they're going to come out and say, "Okay, you have to have this, and if you don't have it by X amount of time, you're suspended." We're just waiting on that ball to drop and for them to say, you got 30 days to get this policy, or you're off the platform. We just don't know when that's coming.
Liz: Well, I think we all know that it's better to be proactive in these situations than it is to be reactive. So erring on the side of caution.
Liz: ... that's what I always advise people to do. Do sellers also have to carry product liability as well as commercial liability?
Ashlin: They don't per the terms of service but it's not much more expensive. We just bundle everything together, the product liability and general liability. Kind of what that means is anything that you do or say as a business, so you go out and say, "Hey, my mouse, pad's going to make your finger lose 10 pounds a week." That's going to be what you do and say that's going to be general liability. If you don't lose weight, click on the mouse pad or mouse. Product liabilities can be if this mouse pad or this mouse explodes and it leaks battery juice all over my desk and ruins my desk or leaks, battery juice and I put my finger in it and now I have cuts and burns all over my finger. That's product liability. That's going to cover what your product does to harm someone or someone's personal property.
Ashlin: Now, one of the big myths that are out there is we hear all the time is, "Well, I'm a RA, OA or wholesaler. This isn't my product. I'm not private label, I'm not responsible for the damages." That's not true. Maybe you're not going to be held liable for the million dollars, but you're still going to have to defend yourself. We had a claim in the last couple of years where someone bought a watermelon cutter and it was wholesale off of a FBA seller and she was cutting the watermelon and the handle of the watermelon broke, the watermelon cutter broke off and she cut the tip of her finger off.
Ashlin: She sued the manufacturer, she sued Amazon and she sued the third party wholesaler. Now, the third party wholesaler, we know they're not responsible for the product. We know they're not responsible for the damage to the finger, but they were still pulled into that lawsuit and the company had to defend them. We had to go in there and say, "Hey, this is not our client's fault. They are not responsible for this." It still costs 30 some thousand dollars to defend them from the lawsuit to get their name dropped. Maybe you're not going to be liable for the million dollars for that tip of the finger. But you're going to be liable for the cost to defend you.
Ashlin: So a $500 dollar insurance policy versus a $30,000 dollar bill for attorneys. I think I'd just buy the damn policy.
Liz: I have always said that you're so good at putting the fear of God into every one of these sellers. You spoke at Midwest eComm-
Ashlin: Well, it's just crazy stuff and it's like if you're going to be a business, act like a business. If you have a storefront, would you just say nobody's not going to sell it or nobody's going to sue me? No, you would have insurance before you will open that door.
Liz: That's true. So tell me about this. It's been exciting to hear that you have this E-Com owner's group health insurance, because I think that's something brand new that you invented.
Ashlin: I didn't invent it. We just created a way to work the system that you guys can get discounted health insurance. Some, a lot of our clients are leaving their full-time jobs and going into eCom on their own and they're saying like, "Hey, I can't find health insurance. I can't find cheap health insurance. Can you help me?" My first answer is, "No health insurance is going to be cheap. I mean it's just what it is. Welcome to America health insurance sucks period."
Ashlin: But what we were able to do is to create an association so you guys get a group rate for it. Now the only catch is that it's not individual. It can't just be, "Hey Ashlin Hadden needs insurance and I need individual health insurance." They just can't do it. It is a group rate. What that means is you're ensuring, the buyer is your business. You have to have more than one person. You have to have two lives to be able to qualify for the association.
Ashlin: If it's you and your wife and you both work in the business, that would qualify you for the group rate. If it's you and two employees, that will qualify also. So it's just, it's more of a business group policy than an individual group policy. But it's an option, if you're trying to leave your company and you can't because you don't have health insurance. This is a great option for you.
Liz: That's awesome. You also have coach guru liability insurance. I'm intrigued by that. So what brought that into being?
Ashlin: So a lot of YouTubers, a lot of groups like the Jim Cockrum's is and the TWFs and those types of companies, those are your gurus. Those are your people who have audiences and you could be held liable for what you say on your podcast and what you say on your Facebook groups, things like that. Let's say, Jim Cockrum comes out and says, "Hey everybody by Ashlin Hadden's insurance. She's amazing. We love her. She's great." And I don't do something right and I screw up. They could Sue Jim Cockrum for referring those business people to me. So this guru professional liability is what it's called, helps protect that.
Ashlin: If I say something and refer people business or I say something like, "Hey, you need to go into your Amazon account and make this change and this change." And you make those changes and you get suspended or you lose money, you guys could sue me for giving those referrals and giving that that professional opinion to you. That's really what that is. If you have a group, you have a following, you have a Facebook page, you give advice, you do coaching, you do like a one on one coaching, any of those types of things, you could be sued for what you say. Professional liability just protects you if you say something wrong and someone decides to sue you.
Liz: That's awesome.
Ashlin: Yep. It's a lot of stuff, isn't it?
Liz: It is. It is. I had on my list that I wanted you to tell some horror stories, but I think the lady cutting her fingertip off was bad enough. I don't know that we want to-
Ashlin: I've got another one.
Liz: All right. Bring it on.
Ashlin: This one is really, really stupid. A customer buys something on Amazon from a third party seller, gets shipped to their house. They don't get the package off the porch at night, go out in the morning to go get his paper trips over the box, breaks his hip and breaks his clavicle. Sues the manufacturer, sues Amazon, sues the UPS and sues the third party seller because the dude tripped over a box. Nothing to do with our client. The dude just didn't open eyes and look at the box and we had to defend him.
Liz: And that costs a lot of money?
Ashlin: Yeah, it was up in the 30 this one was more than the other one. This was like, I would say closer to the $35,000 dollar range.
Liz: Wow. So it's important to have your assets covered. Ashlin has shirts to that effect.
Liz: Ashlin, thank you so much. If people want to get in touch with you, tell them how to do that.
Ashlin: You can hit me up on Facebook. Ashlin D. Hadden. We have a Facebook page, Ashlin Protects Your Assets. You can hit me up on Instagram or you can email us at sales@Ashlinhaddeninsurance.com.
Liz: Awesome. Thank you so much.
Ashlin: Thank you.
Liz: We'll talk to you next time and everybody have a great weekend.
Ashlin: Bye guys.
Originally published on August 16, 2019, updated June 4, 2020
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.