How Does InsuraTech Amazon Suspension Insurance Work?

Being suspended from Amazon is a seller’s worst nightmare. Sales stop and payments are frozen, sometimes for weeks or months, while you desperately make your case for reinstatement. Your expenses – loans, wages, rent and more – continue to mount up all the time you are suspended.

Back in 2017, Amazon suspension insurance was introduced to the market by InsuraTech. This covers lost sales and expenses while you are suspended, addressing head-on the serious damage that suspension can cause.

Surprisingly, many sellers have remained on the fence about suspension insurance. Some think it’s just too good to be true – they can’t believe that anyone would insure them against the random whims of one of the world’s largest companies. Others doubt that the insurance will really pay out as promised.

So, we set out to demystify Amazon suspension insurance and explain the whole process, right from applying for a policy through to making a claim when you have been suspended.

Thank you to Nicole Geiger Welden and Matt Lovell of W.E.L.L. Insurance for their help with this article.

Who can apply for InsuraTech suspension insurance?

Any US-domiciled business can apply for suspension insurance. Sellers in other countries may be supported in the future.

The insurance isn’t technically just for Amazon – sellers on other marketplaces can also take out a policy. However, Amazon is currently the hotbed for seller suspension.

Businesses of any size can be insured, with coverage limits from $50,000 to $1,000,000. The number of days of coverage can also tailored, from 30 to 180 days.

Suspension insurance is available for any business model: private labelers, arbitrage sellers and wholesale businesses can all take out the insurance. Sellers who have been suspended before can also apply but may face larger premiums.

How much does this suspension insurance cost?

Premiums start at a few hundred dollars per year, depending on your annual gross sales, and weighted by factors including:

  • How long you’ve been in business
  • Your average seller feedback rating
  • Your total annual sales from private label, retail arbitrage and wholesale
  • If you’ve ever been suspended before

Your business model does influence the premium, so a seller with sales of $500,000 from wholesale products would have a different premium to a seller who makes $500,000 a year from private label.

Discounts are applied for businesses that have been established for three years or more, with the discount increasing for each year that a seller has been in business. Sellers who have been in business for eight years or more get the maximum discount.

Previous suspensions are also taken into account – the more suspensions you’ve had the higher your premium will be.

What happens if I need to make a claim?

The first thing you have to do is to contact the insurance company within 24 hours to tell them that you have been suspended. You also need to hire a suspension consultant within 24 hours, and there is a $500 allowance built into the policy to help offset that cost.

It is important to note that there is a 120 hours (five days) deductible on the policy. This means you won’t be compensated until you’ve been suspended for 121 hours. At that point, the coverage kicks in right from day one. So if you’re suspended for six days, you get paid for six days, whereas if you’re suspended for four days, you won’t be compensated at all.

How much will I get if I’m suspended?

The payout you receive is calculated from the net profit you’ve missed out on while suspended, plus normal business operating expenses including rent and wages.

To calculate this, you have to provide the claims team with daily sales records, payroll journals, profit and loss statements and proof of expenses incurred during the time you were suspended. You’ll also be asked to provide read-only access to your Seller Central account so they can run reports.

The amount paid is based on how your business is performing at the time of the suspension. So if you made $100,000 last year but have made $150,000 this year because you’ve got a hot item, this will be taken into account. They will then add in the expenses your business incurred while you were suspended.

When you are reinstated by Amazon, you’ll need to call the insurance company again, and provide supporting documents to their claims team. Once they have everything they need, you will be paid. The processing time varies but payment can happen within just a few days of being reinstated.

Will I be covered for more than one suspension?

This depends on a few factors. The first is whether you’ve already reached your coverage limit, or used up all the days of cover. So if you bought 90 days of coverage and have already been suspended for 90 days within the year, you will no longer be covered. Likewise, if you have a coverage limit of $250,000 and that amount has already been paid out, you won’t be covered for any further suspensions.

The policy will also not cover you if you have claimed before for a suspension that was imposed for the “exact same reason”. For example, if you are suspended for having a substandard late shipment rate, that would be covered once. But if you don’t make any changes and are suspended again for having a high late shipment rate, you would not be covered that time.

You would still be covered if you were suspended through no fault of your own. So if you were suspended twice due to false inauthentic goods claims, but proved your stock was legitimate on both occasions, you would be covered.

What is ASIN-level coverage?

This comes as part of the standard insurance policy, and can be used when just one of your products has been suspended rather than your entire selling account. If you decide to use it, you need to contact your insurance company within 24 hours of that ASIN being suspended.

This part of the policy is of most use to large sellers with a particularly lucrative ASIN because there is a $5,000 deductible, meaning that you aren’t covered for the first $5,000 of loss due to that ASIN being suspended. The limit for this type of cover is $350,000, as individual products tend to be suspended for less time than entire seller accounts.

When will this insurance be available outside the US?

There are plans to expand Amazon suspension insurance to Australia, Canada and the UK in the next phase. No date has been announced for that yet.

Is there any other kind of insurance that Amazon sellers need?

A lot of people don’t realize that Amazon requires sellers with a professional selling plan to have general liability and product liability insurance with coverage of at least $1,000,000.

Amazon require you to make them a named party on the policy and may ask you to provide proof that you (and they) are covered. Just because they haven’t asked you yet, doesn’t mean they won’t!

Amazon suspension insurance is provided by InsuraTech and underwritten by Lloyd’s of London. It is available through two agents: W.E.L.L. Insurance and Ashlin Hadden.

This article does not constitute financial or legal advice and should not be taken as such. Always discuss your specific requirements and questions with your own insurance provider.



Did I understand correctly that your payment for your loss would come AFTER you are reinstated? If this is true, a company could go under before any funds arrive. What if you are not reinstated?

Nicole Welden
Nicole Welden

You have a valid concern. The way the policy is set up at this time, is payment when you are reinstated.

In reply to Cheana

Is it true that there is no insurance coverage if your appeal to be reinstated is denied?


So, with all the weasel clauses, the insurance is basically worthless to many sellers under many common circumstances. Thanks for the clarification.

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