Product liability insurance pays for legal defense and damages when someone claims your product injured them, for example a rash, burn or eye injury from a cream. Amazon US requires commercial liability insurance of at least USD 1 million per occurrence and in aggregate, naming Amazon as additional insured, within 30 days after you pass USD 10,000 in gross proceeds in a month, and from November 2, 2026 regardless of sales for products in its enhanced safety categories. Walmart Marketplace asks for USD 1 million per occurrence and USD 2 million aggregate once you pass USD 100,000 in GMV in 12 months. When the factory is abroad, the brand named on the label and the importer carry the risk, so buy the policy in your own company's name before launch.
What product liability insurance is
Product liability is the legal responsibility of businesses in the chain of manufacture and sale for harm caused by a defective product. In the US it comes from state tort law (negligence, strict liability and breach of warranty), not from one federal law. A product can be defective in its design, in how a batch was made, or in its warnings and instructions. For skincare, typical claims are an allergic reaction, a chemical burn from a peel, an eye injury, or an infection from a contaminated batch.
For a small brand the cover usually sits inside a commercial general liability (CGL) policy, which includes "products and completed operations". It can also be a separate product liability policy. The terms you will see on every quote:
| Term | What it means |
|---|---|
| Per occurrence limit | The most the insurer pays for one incident, for example USD 1 million |
| Aggregate limit | The most it pays for all claims in the policy year, for example USD 2 million |
| Occurrence basis | The policy that was active when the injury happened pays, even if the claim comes years later. Amazon requires this basis |
| Claims-made basis | The policy active when the claim is made pays, so you need continuous cover or "tail" cover after you stop |
| Deductible or self-insured retention | The part of each claim you pay yourself. Amazon caps it at USD 10,000 |
| Additional insured | Another company, such as Amazon or a retailer, that is also protected under your policy for claims about your products |
| Certificate of insurance (COI) | A one-page proof of cover issued by your insurer, in the US usually on the ACORD 25 form, that you upload to Amazon or send to a retailer |
| Umbrella or excess liability | A policy on top of the CGL that adds higher limits |
What it covers and what it does not
A product liability policy usually pays for:
- Legal defense, even when the claim turns out to be weak. For a small brand this is often the largest cost.
- Settlements and court awards for bodily injury, such as medical bills and pain and suffering.
- Property damage caused by the product, for example a leaking bottle that stains furniture.
- Claims against additional insureds such as Amazon or a retailer, when the claim is about your product.
What it often does not cover, or only covers with an extra endorsement. Ask your insurer to show you each of these in the wording:
- Recalls. Standard US CGL forms exclude the cost of recalling or withdrawing your own product. That needs separate recall cover (below).
- Your own product. Replacing or refunding the defective units themselves is not covered, only the harm they cause.
- Professional services. An esthetician who applies your peel in a treatment room needs professional liability cover for the treatment itself.
- Drugs and special categories. In the US a sunscreen, an acne treatment with benzoyl peroxide or salicylic acid, or an anti-dandruff shampoo is an over-the-counter drug. Tell the insurer, because some policies rate or exclude drugs differently. See cosmetic or drug.
- Territory. Check that the policy covers claims in every country you sell to. Walmart's supplier requirements, for example, call for product liability that covers claims occurring worldwide.
- Known problems and fines. Incidents you knew about before the policy began, and government fines or penalties, are normally outside cover.
- Advertising claims. A false advertising action about a claim such as "clinically proven" is a different risk from a bodily injury claim. Keep your claims supported: see what you can claim.
Who is liable when the maker is abroad
Many founders assume the factory carries the risk. In practice the brand does, because the brand is the company whose name is on the pack, and injured customers sue the businesses they can reach.
| Market | Who can be held liable | Source |
|---|---|---|
| United States | Any business in the chain: the manufacturer, the brand, the importer, the distributor and the retailer. Under MoCRA the "responsible person" is the manufacturer, packer or distributor whose name appears on the label, which for private label is the brand; that company must report serious adverse events to FDA within 15 business days and is the one FDA orders to stop distribution in a mandatory recall | State tort law; 21 U.S.C. 364, 364a, 364g |
| United Kingdom | The producer, anyone who puts their name or trade mark on the product and so holds themselves out as the producer, and the importer into the UK | Consumer Protection Act 1987, section 2 |
| European Union | For products placed on the market after December 9, 2026: the manufacturer and, when the manufacturer is outside the EU, the importer, the manufacturer's authorized representative and, where neither exists, the fulfillment service provider | Product Liability Directive (EU) 2024/2853, Articles 2 and 8 |
MoCRA also says plainly that it does not change state product liability law, so FDA compliance is not a defense to an injury claim, although good records help a lot. Three practical points:
- Your contract with the manufacturer may include quality warranties and an indemnity. They help, but collecting from a company abroad is slow, so your own policy is the first line.
- If you import yourself, your company is the importer of record. Tell the insurer, because importers and brand owners are rated differently from retailers.
- Selling in the EU or UK through a responsible person service does not move your product liability to that service. The Responsible Person handles the cosmetics file and notifications; ask your insurer how the policy treats EU and UK sales.
Amazon's insurance requirement
Amazon's rule comes from section 9 of its Business Solutions Agreement and its Seller Central page "Commercial Liability Insurance Requirements" (US store, as of October 2026):
- When you need it
Within 30 days after your gross proceeds on Amazon.com exceed USD 10,000 in any month, or earlier if Amazon asks. In Canada the threshold is CAD 10,000 and the limit CAD 1 million.
- What the policy must look like
Commercial general, umbrella or excess liability, written on an occurrence basis; at least USD 1 million per occurrence and in aggregate, covering products, products and completed operations and bodily injury; a deductible of no more than USD 10,000, shown on the certificate; cover for all products you list on Amazon.com; no sunset clause.
- Who must be named
"Amazon.com Services LLC and its affiliates and assignees" as additional insureds. The insured name must match the legal entity in your Seller Central account (single-member LLCs may use their trade name).
- Which insurers qualify
An insurer with global claim handling and a rating of S&P A- or AM Best A- or better, which gives Amazon at least 30 days' notice of cancellation, change or non-renewal. Amazon also lists vetted providers through its Amazon Insurance Accelerator, under Settings, Account Info, Business Insurance.
- What changes on November 2, 2026
Sellers with products in categories that have enhanced safety listing requirements must hold a USD 1 million policy for those products whatever their sales, for new and existing listings. Sellers based in Mainland China must buy new policies through the Amazon Insurance Accelerator.
Is skincare in an enhanced safety category? Amazon's category page, as of October 2026, describes one category as "consumable and ingestible products including, but not limited to, products for topical application, ingestion, or consumption to maintain or improve health and appearance," and lists dietary supplements, ingestible OTC medication and ophthalmic drugs as the products included. It also says the list changes and does not cover every product. Trade press reported the change as covering cosmetics. The safe reading for a skincare brand is: check Account Health for each ASIN, and in any case have the policy in place before your first shipment to FBA, not after your first USD 10,000 month. More on selling there in selling skincare on Amazon.
Walmart and retail buyers
Retailers write insurance into their vendor or seller agreements, and the request usually comes with a certificate of insurance form.
- Walmart Marketplace. Sellers must submit a certificate with general and product liability insurance once they exceed USD 100,000 in GMV in any 12-month period, or when Walmart asks: limits of USD 1 million per occurrence and USD 2 million aggregate, the legal business name matching Seller Center, and "Walmart Inc., its subsidiaries and its affiliates" as additional insured. Walmart may withhold orders and payments until an approved certificate is on file.
- Walmart suppliers selling goods for resale. Walmart's supplier insurance requirements (February 2025) ask for CGL of USD 1 million per occurrence and USD 2 million aggregate, product liability that covers claims worldwide at the limit in its Supplier Liability Insurance matrix (from USD 1 million per occurrence and USD 2 million aggregate in Category I up to USD 10 million and USD 20 million in Category III), insurers rated AM Best B+ or better, waiver of subrogation and primary, non-contributory wording.
- Beauty retailers, spas, salons and distributors. Ulta, Sephora, department stores and distributors set their own limits in their vendor terms, which are usually shared only once you are in talks. Ask for the insurance clause early, because higher limits or umbrella cover can take a few weeks to arrange. See getting into Ulta and Sephora and wholesale and distributors.
How much coverage to buy
Start from the strictest channel you sell in, then add for growth:
| Where you sell | Minimum the channel asks | Notes |
|---|---|---|
| Your own Shopify or website | No platform minimum | Still worth buying from day one; a single claim can exceed a year's profit |
| Amazon.com | USD 1 million per occurrence and aggregate | Amazon as additional insured, deductible no more than USD 10,000 |
| Walmart Marketplace | USD 1 million per occurrence, USD 2 million aggregate | Above USD 100,000 GMV in 12 months, or on request |
| Walmart as a supplier | USD 1 million and USD 2 million CGL plus product liability per its matrix | Worldwide claims cover, AM Best B+ or better |
| Retail chains and distributors | Set in each vendor agreement | Ask for the clause before you sign |
Higher-risk products push insurers and buyers toward higher limits or umbrella cover: chemical peels, high-strength acids and retinoids, products for babies and children, eye products, intimate care, sunscreens and anything sold as an OTC drug.
Recall insurance and a recall plan
A recall is expensive even when nobody is hurt: notifying customers and retailers, shipping stock back, destroying it, replacing it, paying for testing and lost sales. Standard CGL policies do not pay for this. Product recall (or product contamination) insurance is a separate policy that can cover some of these costs. It is less common for small brands, but worth asking about once you sell through retailers who would charge you for pulling stock.
Insurance is the second line. The first is being ready to act fast. Under MoCRA, FDA can ask the responsible person to stop distribution and recall a cosmetic, and order it if the company refuses, when there is a reasonable probability the product is adulterated or misbranded and will cause serious adverse health consequences or death. A written recall plan, batch numbers on every unit and a list of where each batch went are what make a recall small. The step-by-step plan is in recalls and adverse events; the MoCRA side is in MoCRA compliance.
How to get quotes, step by step
- List your products, markets and channels
Every SKU, whether it is a cosmetic or an OTC drug, the countries you ship to, and each channel with its insurance clause. Add projected sales for the first 12 months; insurers price mainly on sales and product risk.
- Pick the limits from the strictest channel
Usually USD 1 million per occurrence and USD 2 million aggregate for a first skincare line selling on Amazon and Walmart, more if a retailer asks.
- Find an insurance agent who places product businesses
Ask for experience with cosmetics or personal care brands that import. Amazon's Insurance Accelerator and Walmart's suggested provider are options for marketplace sellers; compare them with an independent quote.
- Prepare the document pack
See the table below. A complete pack gets faster and often better quotes, because the underwriter does not have to assume the worst.
- Compare quotes line by line
Not only the premium: limits, deductible, occurrence or claims-made basis, territory, exclusions (recall, drugs, specific ingredients), whether additional insured endorsements for Amazon and retailers are included, and whether defense costs sit inside or outside the limits.
- Bind before the first sale
Start the policy before stock ships, and get certificates naming each additional insured with the exact wording each channel asks for.
- Upload and diary the renewal
Upload the certificate to Seller Central and Walmart Seller Center, send it to retailers, and set a reminder 30 to 45 days before renewal. A lapse can deactivate listings.
- Update the insurer when things change
New products (especially a sunscreen or an acid peel), new countries, a new manufacturer or much higher sales than declared all need to be reported.
Documents insurers ask for
Questions differ by insurer, but these are the documents underwriters for cosmetics usually want to see, and every one of them should already exist if your product is made properly:
| Document | Why the insurer wants it | Where it comes from |
|---|---|---|
| Product list with full ingredient lists (INCI) | To spot higher-risk ingredients and drug actives | Your manufacturer |
| Labels and artwork, with warnings and directions | Missing warnings are a common basis for claims | Your designer, checked against the market rules |
| Claims list and the evidence for each claim | Unsupported claims raise the risk of complaints and suits | Your test reports and claim file |
| Safety data sheet (SDS or MSDS) | Hazard and handling information | Your manufacturer |
| Certificate of analysis (COA) and microbiology per batch | Proof that each batch met its specification and was free of harmful microbes | Your manufacturer, every batch |
| Product specification and stability data | Shows the product stays safe for its shelf life | Your manufacturer or lab |
| Test reports: challenge test, patch test or HRIPT, heavy metals | Evidence of preservative efficacy and low irritation | Accredited labs, see the testing guide |
| Manufacturer's GMP certificate (ISO 22716) and FDA facility registration | Shows the factory works to a recognized quality system | Your manufacturer |
| MoCRA product listing and safety substantiation records | Shows the US regulatory basics are done | Your company or the team that filed it |
| Complaint handling and recall procedure | Shows you will catch problems early | Your company (see recalls and adverse events) |
| Manufacturing or supply agreement | Quality warranties and indemnities from the maker | Your contract |
| Claims history | Past incidents price the future | Your company |
What it costs
Premiums depend on sales, product risk, limits, deductible, claims history and where you sell, so the only reliable number is a quote for your own line. As a reference point, Insureon, a US online insurance marketplace for small businesses, reports that its small business customers pay a median of about $45 per month, or about $538 a year, for general liability insurance across all industries. A skincare brand that imports, sells on Amazon and adds higher limits or an umbrella policy should expect its own quote to differ. Budget it as a fixed yearly cost in your launch plan, next to trademark and testing; see the cost to start a skincare line.
- Waiting for Amazon's USD 10,000 month. A claim can come from the first order, and from November 2, 2026 some categories need cover from the first listing.
- Relying on the factory's insurance. A manufacturer's policy abroad rarely protects your company, Amazon or your retailers in the US.
- Wrong names. A certificate in a personal name or a trade name that does not match the Seller Central or Seller Center legal entity is rejected.
- Missing the exact additional insured wording each channel asks for.
- Not telling the insurer about OTC drugs such as sunscreen or acne products, or about new countries. Undeclared risks can lead to a denied claim.
- Assuming the policy pays for a recall. Standard CGL cover does not.
- Letting the policy lapse at renewal, which can deactivate listings and break retail agreements.
- Making claims you cannot support. They invite complaints that turn into claims and are not what liability insurance is for.
- Policy in your company's legal name, matching Seller Central and Seller Center.
- Limits set by the strictest channel: at least USD 1 million per occurrence (USD 2 million aggregate for Walmart).
- Occurrence basis, deductible no more than USD 10,000 for Amazon.
- Territory covers every country you ship to.
- Additional insured endorsements for Amazon and each retailer, with their exact wording.
- Insurer rating meets each channel's minimum (Amazon: S&P or AM Best A-; Walmart supplier: AM Best B+).
- OTC drug products, high-risk products and imports declared to the insurer.
- Document pack ready: INCI, labels, claims evidence, SDS, COA, specification, stability, test reports, GMP certificate, MoCRA listing.
- Recall plan written and batch numbers on every unit.
- Recall insurance considered before entering retail.
- Certificates uploaded; renewal reminder set 30 to 45 days ahead.
- Insurer told about new products, markets or a new manufacturer before they launch.
How KoreanOEM helps
We do not sell insurance. We make the product and the paperwork that insurers, Amazon and retailers ask for. KoreanOEM is a Korean skincare OEM and private label manufacturer: our own chemists in Busan develop your formula. Production is in Korea at an ISO 22716 (cosmetics GMP) facility that is FDA registered under MoCRA.
- The document pack. Full INCI list after the NDA is signed, COA and microbiology for every batch, MSDS, specification, stability data for ready library formulas and a copy of the ISO 22716 certificate, all in your My page. See certifications and export documents.
- Tests that back your claims. Challenge test (ISO 11930) from USD 1,000 per formula, patch or low-irritation test from USD 1,000, HRIPT from USD 3,000 (50 people) or USD 5,500 (100 people), heavy metal test about USD 150.
- US filing. MoCRA product listing filed by our team for USD 150 per SKU; a label proof check for warnings and directions before printing.
- Traceability. A batch number on every unit, so a complaint can be traced to one batch and its COA.
All prices are on the fees page.
Frequently asked questions
Do I need product liability insurance to sell skincare?
Do I need liability insurance to sell skincare on Amazon?
How much product liability coverage does a skincare brand need?
Who is liable if a customer reacts to a private label product made in Korea?
What does additional insured mean?
Does product liability insurance cover a recall?
How much does product liability insurance cost for a skincare brand?
What documents does an insurer want for a skincare line?
Sources
- Amazon Seller Central (US): Commercial Liability Insurance Requirements
- Amazon Seller Central (US): Product categories with enhanced safety listing requirements
- Amazon Services Business Solutions Agreement, Insurance section and definitions
- PPC Land: Amazon's September 3, 2026 notice on safety-category insurance (news report)
- Walmart Marketplace Learn: Liability insurance policy
- Walmart: Insurance requirements for suppliers (February 2025)
- Cornell LII Wex: Products liability
- 21 U.S.C. 364: MoCRA definitions, including responsible person
- 21 U.S.C. 364a: Serious adverse event reporting
- 21 U.S.C. 364g: Mandatory recall authority
- 21 U.S.C. 364j: Preemption and the savings clause for state product liability law
- legislation.gov.uk: Consumer Protection Act 1987, section 2
- EUR-Lex: Directive (EU) 2024/2853 on liability for defective products
- Insureon: Product liability insurance cost
Checked against these sources in October 2026. Rules and fees change; check with the authority or your importer before you sell.