Insurance Requirements for Amazon, TikTok Shop, and Big-Box Retail

Amazon requires professional sellers to carry commercial general liability insurance with at least $1 million in coverage once sales cross a monthly threshold, while TikTok Shop currently has no insurance mandate at all. Big-box retail is a different story: vendor agreements at chains like Kroger, Target, and Costco commonly require $3 million to $5 million in limits, with stricter fine print attached. That gap between marketplace minimums and retail vendor requirements is where growing consumer brands get caught.

What insurance does Amazon require from sellers?

Amazon's Business Solutions Agreement requires sellers to carry commercial general liability insurance with limits of at least $1 million per occurrence and in the aggregate once gross proceeds exceed $10,000 in any single month of sales in the United States. Once you cross that threshold, Amazon gives you 30 days to provide proof of coverage.

The requirement has teeth beyond the limit itself. The policy must respond to product claims, which means products and completed operations coverage, the part of a general liability policy that pays for injury or damage caused by products you have already sold, has to be included rather than excluded or stripped down. The policy must also name Amazon and its assignees as an additional insured, a party added to your policy so it can claim protection under your coverage when a customer claim pulls it in.

The enforcement mechanism is what should get your attention. A seller that falls out of compliance risks account deactivation, and a deactivated account is ineligible for disbursements for 90 days. For a brand running on tight cash cycles, a payout freeze is usually a bigger threat than the underlying liability claim.

Does TikTok Shop require product liability insurance?

No. TikTok Shop's own seller guidance states that general liability insurance is not a mandatory requirement, though it notes the requirement may be added in the future with advance notice to sellers. There is no published threshold, no published limit, and no deadline.

That does not mean the exposure is optional. Selling a physical product to consumers creates product liability exposure whether or not a platform asks for proof, and TikTok Shop is specifically built to scale products overnight. A viral week can move more units than a typical brand's whole quarter, which means your exposure can outgrow your coverage faster than any paperwork requirement would have flagged. Treat general liability with real products coverage as a cost of selling physical goods, not a box a platform makes you check.

How much insurance do big-box retailers require?

Most national retail vendor agreements require between $3 million and $5 million in general liability limits, several times Amazon's floor. The exact numbers vary by retailer and change over time, but the pattern is consistent:

• Kroger requires $3 million per occurrence and aggregate limits, with coverage placed through carriers rated A- or better.
• Target requires $5 million per occurrence including products liability, plus additional insured status by endorsement, primary and noncontributory wording, waiver of subrogation, and advance notice of cancellation. Its authoritative requirements live inside its vendor portal, so work from the copy in your own agreement.
• Costco requires $5 million per occurrence, per general aggregate, and per products and completed operations aggregate, written on an occurrence form only. Costco does not mandate recall insurance, but its purchase order terms put recall costs on the supplier, which leaves an uncapped contractual exposure that is uninsured by default.
• Whole Foods tiers its requirements by product risk category rather than sales volume, with national suppliers commonly seeing $1 million per occurrence and $2 million aggregate limits.

Two cautions. First, several of these programs are published only inside gated vendor portals, so always work from the current version of your own vendor packet rather than a secondhand summary. Second, the certificate is not the requirement; retailers increasingly verify the endorsements behind it.

Why doesn't my Amazon policy satisfy a retail vendor agreement?

Because a policy built to clear a $1 million marketplace floor usually fails a retail vendor packet on limits, form, or fine print. The common failure points repeat across brands:

• Limits. The jump from $1 million to $5 million typically comes from adding excess layers over your primary policy, not from rewriting the primary at a higher limit. If your program was never designed to stack, that restructuring happens under deadline pressure.
• Policy form. Some low-cost policies are written on a claims-made basis. Costco explicitly requires an occurrence form, meaning the policy covers injury that happens during the policy period no matter when the claim is eventually filed. Converting form types midstream creates gaps if it is not handled carefully.
• Products coverage. Packaged small-business policies sometimes exclude or sublimit products and completed operations. The declarations page can look compliant while the form underneath is not.
• The named insured. Certificates that name the wrong legal entity are a recurring problem. A parent company and a brand's DBA line are not the same insured, and a retailer's compliance vendor will catch the mismatch.
• Endorsements that are not actually there. An additional insured endorsement described on a certificate but absent from the policy's schedule of forms protects no one. The same goes for primary and noncontributory wording and waivers of subrogation.
• Renewal drift. A certificate uploaded at onboarding and never refreshed at renewal quietly lapses your compliance even when the coverage itself renewed fine.

If certificates and additional insured mechanics are new territory, start with our guides on how certificates of insurance work and additional insured versus certificate holder.

How do you build an insurance program that scales with your brand?

Buy for the channel you are entering next, not just the one you are in today. Retailer onboarding windows are short, and restructuring an insurance program mid-onboarding is how purchase orders get delayed. A program designed to scale looks like this:

1. Start on a real foundation. A general liability policy on an occurrence form, with full products and completed operations coverage, correctly named insureds, and endorsement capability for additional insured and primary wording requests.
2. Add limits in layers. When a channel demands higher limits, add umbrella or excess liability above your primary rather than replacing the whole program. Layered limits scale up cleanly as requirements climb.
3. Treat recall as a contractual exposure. Even where no retailer mandates recall coverage, purchase order terms often make recall costs yours. Evaluate recall insurance on the contract language, not the insurance requirement section.
4. Re-check at every new channel and every renewal. Requirements change, and converting from a marketplace seller to a direct vendor relationship can re-open the entire underwriting conversation. Make requirement review part of renewal, not a scramble after the vendor packet arrives.
5. Keep certificate hygiene. Track who holds your certificates, what each one promises, and confirm every promised endorsement appears in the policy itself. Then re-issue at renewal without being asked.

Where a broker fits in

Reading vendor agreements against policy forms is exactly the work a commercial broker should be doing for a consumer brand. That means mapping each channel's requirements to your actual coverage, structuring primary and excess layers so limits can grow without starting over, confirming endorsements exist in the forms schedule and not just on a certificate, and keeping certificates current across every retailer relationship. Velora Risk Partners works with consumer brands at every stage of that curve, from first marketplace threshold to national shelf placement. If a vendor packet just landed or a channel jump is coming, reach out and we will review your program against what the next stage requires.

Frequently asked questions

What triggers Amazon's insurance requirement for sellers?

Amazon's Business Solutions Agreement requires proof of commercial general liability insurance once your gross proceeds exceed $10,000 in any single month of United States sales. From that point you have 30 days to obtain coverage of at least $1 million per occurrence and in the aggregate, including products liability, and to name Amazon and its assignees as additional insureds.

Is insurance mandatory to sell on TikTok Shop?

Not currently. TikTok Shop's seller guidance states that general liability insurance is not a mandatory requirement, while noting it may become one in the future with advance notice. There is no published limit or threshold. Product liability exposure still exists for anyone selling physical goods, so many brands carry coverage anyway, especially given how quickly TikTok can scale sales volume.

What insurance limits do Costco and Target require from suppliers?

Both retailers have required $5 million per occurrence in general liability coverage in recent versions of their supplier programs, with Costco also requiring $5 million products and completed operations aggregate limits on an occurrence form. Target adds endorsement requirements such as additional insured status and primary wording. Always confirm the current numbers in your own vendor agreement, since these programs are updated periodically.

Do I buy one large policy or layer coverage to reach $5 million?

Most brands reach retail-level limits by keeping a primary general liability policy at standard limits and stacking umbrella or excess liability above it. Layering is usually more available in the market and scales more cleanly, because you can add another layer when the next channel demands higher limits instead of replacing your entire program each time requirements climb.

Does Costco require recall insurance?

No. Costco's supplier insurance requirements do not mandate recall coverage. Its purchase order terms, however, generally place recall costs on the supplier, which means the exposure sits with you contractually even though no policy is required. That gap is why many consumer brands evaluate recall insurance based on their contract language rather than the insurance requirements section alone.

What happens if my Amazon account falls out of insurance compliance?

Amazon can deactivate a non-compliant seller account, and a deactivated account is ineligible for disbursements for 90 days. For most brands the frozen payouts are the more immediate financial threat, since inventory and ad spend continue while revenue stops. Keeping the certificate current at every renewal is the simplest way to avoid the problem.