Do I Need Suspension insurance?
Do I Need Suspension insurance?
Well that depends. Are you sure you’ll never be suspended?
Clients keep me on retainer to protect them and we now offer a membership in order to keep that Suspension demon away, but Amazon is a fickle beast. We can never be 100% sure that Amazon won’t initiate new enforcement programs and start pulling accounts down tomorrow or the next day. Sometimes, it seems like Amazon does not even know that themselves, given some team and tool confusion.
Sellers often don’t consider the consequences of a failure to plan ahead for an account suspension, they simply hope against hope that it will never happen to them. But given the numbers of sellers who contact me unsure of the exact reasons behind the suspension, wouldn’t it be worth taking a moment to have a contingency plan? Sellers typically have multiple suppliers to pay and may not have large financial reserves waiting in the wings if Amazon suspends them. As a contingency, sellers have begun protecting themselves with account suspension insurance. This helps them collect some operational funds if their disbursements stop while also allowing them to hire someone like me to help them recover the account. This concept arrives as we see more suspensions than ever for previously minor listing violations or whenever policy enforcement changes and sellers fail to change with it.
Why is This Important?
Sellers have another need for this kind of protection, beyond the immediate stoppage of disbursements. Consider how long Amazon currently takes to respond to suspension appeals. Despite promises received after hitting your Appeal button to hear back within 24 or 48 hours, days of waiting frequently follow appeals submission. Additionally, more often than not sellers see a response that requests more information without specifics as to what was missing in your Plan of Action. Some ASINs never cited in your suspension notification may be cited with a request for invoices, but once you send those, you could receive a fresh email back asking for still more invoices, on yet another ASIN.
Investigators usually do not point to particular weaknesses in your plan, they kick it back and tell you to try again.
You’re struggling to fill in those gaps and often feel stranded in that wilderness for a while. You may be unsure of whether or not your plan really needs new work or if internal teams failed to review it properly given high queue levels, requiring you to take your complete plan elsewhere in an escalation.
If you’re looking at weeks and not days offline, you’ll need to keep operations moving. Laying off staff or failing to pay suppliers won’t do your business any good. If you haven’t stockpiled reserves as a contingency, then those days turning into weeks could also mean the difference between a well-composed Plan of Action and a rush job you throw together out of desperation. Worse still, you may lack the resources to hire a consultant with proper background experience, internal team knowledge, or even a decent track record of success. As with anything in life, we get what we pay for.
Anxiety and desperation typically do not produce good writing or solid appeals that result in a reinstatement. Anxiety and desperation typically do not produce good writing or solid appeals that result in a reinstatement. Anxiety and desperation typically do not produce good writing or solid appeals that result in a reinstatement. To the contrary, taking the right approach and having some time to see it through matters most.
I understand the many questions and fears around the dreaded suspension emails. Nobody wants to live in fear, but everyone needs to prepare, too.
1. Have you been suspended before? Are you at any risk of being suspended for the same reason? Amazon often refuses to reinstate sellers who are regularly suspended for the same cause.
2. Do you have sufficient reserves to survive a suspension period that lasts for a few weeks, not a few days? Many sellers have contacted me and admitted that they could not afford to stay in business if they failed on their appeals.
3. Do you know how internal teams operate when they evaluate who gets suspended, or do you assume that bots are the only force taking down sellers? Are you aware of the proper ways to correspond with internal teams so they will listen?
4. If one or more appeals are denied, Amazon often stops listening and starts sending general denials. Are you prepared for this eventuality? Have you invested enough in account protection?
5. Lastly have you weighed out the numbers around taking the chance of an uninsured suspension versus an insured one? That’s a fairly easy step that can help you ballpark what makes sense and what does not.
I spoke to Nicole Geiger from WELL Insurance to find out more about Amazon Seller Insurance.
So, why is Amazon Suspension Insurance being sold from a Insurance Agency in Kentucky? How did this all begin?
It is pretty simple actually. It began because a successful Amazon seller was looking for more out of their General Liability Insurance than it could provide. You have heard that Necessity is the Mother of all Invention, and that could not be more true in this situation.
Lori Jurans is one of the founders of Where the Polka Dots Roam, a custom designed bedding company that sells online via multiple platforms. After listing on Amazon in 2012 Lori was thrilled to see their sales begin to grow rapidly.
With that growth quickly came the necessity to leverage more and create larger purchase orders. As their purchase orders and overhead expenses began to rise, so did Lori’s anxiety with the realization that a large portion of their business was being built on a platform they did not own. Sound familiar?
Her fear is not unlike the fears we hear from so many e-commerce sellers. What would happen if their Amazon account was suspended today? Their sales would stop, but their expenses would continue. How long can a company withstand that loss of income? And, where would they begin to try and get it reinstated?
It is this fear that caused her to go to her General Liability Insurance agent, Nicole Welden, and ask if her current general liability insurance would cover them if their Amazon Seller Account was suspended. Nicole and her partner, Matt Lovell researched the policy and came back with the conclusion that it would not and, more over there was nothing on the market that would cover an e-commerce seller in that scenario.
How did that idea turn into an underwritten Amazon Seller Insurance policy?
That is essentially the moment that WELL Insurance Agency was born. Matt and Nicole happened to have a good working relationship with James Allen Insurance, InsuraTech, a large General Agency that works directly with Lloyds of London. They believed if any company would consider underwriting this, it was Lloyds of London. After speaking with Tim Craig, the CEO of James Allen Insurance, he agreed that this a product was worth pursuing. That is when the quest began to build a policy that would satisfy this great void in the market.
As of March 1, 2017 the Amazon Suspension Insurance policy is now available to purchase directly through WELL Insurance Agency. This policy will not replace your General Liability insurance which Amazon requires every seller to carry or risk being suspended, this policy is specifically designed to cover a seller in the instance of an account suspension and works with all e-commerce platforms.
What does Amazon Seller Insurance cover?
The coverage is underwritten by Lloyds of London, the oldest insurer in the world, insuring risk since 1688. This is truly a one of a kind policy, something the insurance industry has never seen before. The policy is designed for businesses based in the U.S.A. only at this time. The policy period is for one year; however, the policy will only pay up to a total of 90 days due to a covered suspension during this policy period. We offer coverage of up to $1,000,000, which will be paid at a per day limit depending on the level of coverage. Even if you have been suspended before you may still be eligible for this policy, eligibility and pricing are determined based on information provided during the application process.
How is a loss settled?
- We issued your policy with a $1,000,000 coverage limit
- Your per day coverage limit is $11,111
- Your franchise deductible is 120 hours
- Your account is suspended for 15 days
Since you have qualified for a franchise deductible the policy will pay you for your actual loss incurred or up to the maximum per day limit of $11,111 for the entire 15 day suspension period for a total payment up to $166,665. To determine the daily limit, you will need to determine what your net income (net profit or loss before income taxes) that would have been earned or incurred and what your continually normal operating expenses incurred are including payroll.
We are so proud to offer this and to work with Amazon Sellers directly to help them regain some control and power over their livelihood. We know how hard these men and women have worked to build their businesses. Most sellers are trying their best to follow Amazon’s policies and only want to follow best business practices, however mistakes and misunderstandings can happen. We hope our sellers can sleep better at night knowing that they have a policy that will back them up in case a suspension happens. We have you covered so you can focus on what you do best — growing your business!
The policy takes literally 5 minutes to quote, bind, pay and issue all from a secure link on our website. Don’t wait, get your policy issued today, as capacity for this policy is limited.