September 23, 2021

Amazon to pay customers up to $1,000 if a product causes injury | Insurance News

The policy is meant to address complaints that customers have lodged about third-party merchants who use Amazon’s online marketplace to sell their goods. announced it will pay customers up to $1,000 if a product sold through its website injures people or damages property, even if the product was sold by a third-party seller.

The world’s largest online retailer also pledged to cover the cost of such claims — which it said comprise 80 percent of cases in its store — without seeking reimbursement from third-party sellers as long as they had adhered to’s rules and hold valid insurance.

The policy, which goes into effect September 1, was announced in a blog post by Amazon on Tuesday.

The policy is meant to address complaints that customers have lodged about third-party merchants who use Amazon’s online marketplace to sell their goods.

In recent years, consumers have raised concerns about the availability of faulty, counterfeit or dangerous goods on the platform.

In July, the United States Consumer Product Safety Commission filed a complaint (PDF) against Amazon, seeking to hold it accountable for children’s sleepwear that did not meet fire safety requirements, more than 24,000 faulty carbon monoxide detectors and nearly 400,000 hair dryers that came with a risk of shock or electrocution.

The federal product safety watchdog acknowledged that after being informed about the defective products, Amazon pulled some of the product listings, alerted customers and offered refunds, but continued to maintain it was not legally responsible for items sold by third-party sellers.

The commission, however, said it believes Amazon should be held responsible for goods sold by third-party merchants on its site.

Amazon has maintained that it is merely the platform that connects buyers and sellers for such sales, while the Consumer Product Safety Commission is seeking to have Amazon classified as a distributor under the Consumer Product Safety Act. If it is successful, such a distinction would increase Amazon’s responsibility for product safety and recalls.

The new policy that goes into effect September 1 will see Amazon “facilitate resolution of property damage and personal injury claims between the customer, the seller, and their insurance provider”, the company said in its statement.

After a customer reaches out via Amazon customer service, Amazon will check the validity of the claim, notify the seller and help that company address the issue. If the seller does not respond, “Amazon will step in to directly address the immediate customer concern, bear the cost ourselves, and separately pursue the seller”, the company said.

“By standing behind customers and the products in our store, regardless of who sells them, Amazon is going far beyond our legal obligations and what any other marketplace service provider is doing today to protect customers,” the company added.

As part of Tuesday’s announcement, Amazon also said it is creating the Amazon Insurance Accelerator, which would offer liability insurance to qualified sellers at “competitive rates”.

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