Product Liability Insurance: Do US Retailers Require It?

What Amazon, Walmart, Costco and Target ask for, and whether a policy from home is enough

Brands we work with ask us this all the time:

"A Walmart buyer wants our COI. What is that?"

"We already have product liability cover in Korea. Does it work in the US?"

The short answer: once you sell at any scale on Amazon or into US retail, liability insurance is a condition of doing business, not an option. Amazon and Walmart publish their limits and paperwork on their own pages.

But how much cover you need differs by retailer, and whether a policy bought at home pays a US claim depends on its wording.

What product liability insurance covers, and what it does not

Product liability insurance pays the legal liability your brand faces when a defect in a product you sold injures someone or damages their property.

In the US, this cover sits either inside a commercial general liability (CGL) policy, under the "products-completed operations" part, or in a separate policy. Products-completed operations means injury or damage caused by a product after it has left your hands.

Bigyobigyo, a Korean insurance comparison site, lists these as excluded:

The cost of recalling, inspecting, repairing or replacing a defective product
Fines and punitive damages
Damage to the product itself

PL cover does not pay for a recall. It pays for the harm your product causes to other people.

US product liability is strict: taking care is not a defense

In the US, product liability is generally strict liability. According to Cornell Law School's Legal Information Institute, it does not matter whether the manufacturer or supplier "exercised great care": if a defect in the product causes harm, the seller can be liable.

There is no federal product liability law. Claims rest on negligence, strict liability or breach of warranty, and the rules depend on the jurisdiction.
Liability can reach every party in the chain, from component makers to wholesalers and the retail store.

An injured shopper can sue the store as well as the brand. That is why retailers want to be named on your policy.

Triple-I, citing Thomson Reuters data, reports that in 2020 the median personal injury jury award in product liability cases was $3,908,111, and the average was $7,058,106. These are jury verdicts, not settlements, and they exclude punitive damages.

In the US, showing that you were careful is rarely enough. What matters is whether the product was defective.

Amazon insurance requirements: $1M once you pass $10,000 a month

Amazon requires sellers to buy commercial liability insurance within 30 days after their gross sales on Amazon.com exceed $10,000 in one month, or whenever Amazon asks, according to its commercial liability insurance page. The policy must meet these terms:

Limits of at least $1M per occurrence and $1M in aggregate
A deductible of $10,000 or less
"Amazon.com Services LLC and its affiliates and assignees" named as additional insureds
Written on an occurrence basis, with an insurer rated A- or better by S&P or AM Best

From November 2, 2026, sellers in categories with enhanced safety listing requirements need $1M of cover whatever their sales. The list includes children's products, dietary supplements and OTC medication, small kitchen appliances and lithium battery products.

Do not wait until sales take off. Once you pass $10,000 in a month, you have 30 days to have a policy in place.

Walmart has different rules for suppliers and Marketplace sellers

Walmart suppliers need CGL limits of at least $1M per occurrence and $2M in aggregate, plus product liability limits set by product category. Under Walmart's supplier insurance requirements (dated February 18, 2025):

Non-food products: Category I $1M/$2M, Category II $5M/$10M, Category III $10M/$20M
Food and drink: Category I(F) $2M/$4M, Category II(F) $5M/$10M
Cover for claims occurring worldwide, from an insurer rated AM Best B+ or better, size category VII or better

Walmart Marketplace (page updated December 11, 2025) works differently. US and international sellers must submit a certificate of insurance for general and product liability, at $1M/$2M with Walmart as additional insured, once they pass $100,000 in GMV in any 12-month period, or when Walmart asks.

Selling to Walmart as a supplier and selling on Walmart Marketplace are two different insurance tests.

Costco and Target: $5M in older documents, but your vendor agreement decides

Costco and Target have asked for $5M per occurrence, but in older documents, not current official terms.

Costco: its 2019 US standard terms (filed with the SEC in 2022) required $5M per occurrence and worldwide cover.
Target: a 2020 Bunker article quoting Target's vendor contract gives $5M per occurrence and a worldwide coverage territory.
Ulta: its purchase order terms (updated April 2022) set no dollar figure, only cover of at least the amount Ulta pays the supplier.

Some industry articles say Amazon and Walmart also "frequently require $5M per occurrence." Their own documents show $1M as the base limit. Selling through a distributor? Read the insurance clauses in both contracts. See how brokers, distributors and sales reps differ.

Published numbers are a starting point. The vendor agreement each retailer sends you sets the real limit.

Vendor insurance requirements compared

Limits are per occurrence/aggregate.

Retailer or channel	Coverage asked	Additional insured	Source and year
Amazon seller	$1M/$1M, once monthly sales pass $10,000	Amazon.com Services LLC and affiliates	Amazon Seller Central, 2026
Walmart supplier	CGL $1M/$2M; product $1M/$2M to $10M/$20M by category	Walmart	Walmart supplier requirements, 2025
Walmart Marketplace	$1M/$2M, once 12-month GMV passes $100,000	Walmart	Walmart Marketplace Learn, 2025
Costco	$5M per occurrence	ISO CG 20 15 vendor's endorsement	Costco standard terms, 2019
Target	$5M per occurrence	CG 20 15 or CG 20 26 endorsement	Bunker article, 2020
Ulta	No figure; at least what Ulta pays you	Check the contract	Ulta PO terms, 2022

What a certificate of insurance and additional insured status mean

A certificate of insurance (COI) is a one-page summary of your insurer, limits, endorsements and certificate holder. Walmart's requirements ask for the information on the standard ACORD 25 form. A buyer checks the COI for these terms:

Additional insured: a third party, such as the retailer, that your policy also protects
Vendor's endorsement (ISO CG 20 15): extends your product cover to the retailers that sell your product
Waiver of subrogation: your insurer agrees not to recover what it paid from the retailer
Primary and non-contributory: your policy pays first and does not share the loss with the retailer's insurance

An occurrence policy covers injury that happens during the policy period, even if the claim comes later. A claims-made policy covers only claims made during the policy period, so Walmart asks for an option to buy a 24-month extended reporting period.

A COI is not proof that you bought insurance. It is proof that your policy contains the terms the retailer asked for.

Does a policy bought in Korea cover US claims?

Whether a policy bought in Korea pays a US claim depends on two clauses: the coverage territory and the jurisdiction clause. According to Bigyobigyo, Korean product liability policies come in two types: Korean-language policies for domestic accidents and English-language policies for accidents abroad.

A Korean broker's case study on US drug exports (July 2026) says most US export cover is written on English-language forms, and that a "USA only" territory leaves claims from Canada and the EU uncovered.

US forms work the same way: the ISO endorsement CG 24 23 covers the US, Puerto Rico, Canada and scheduled countries, for liability decided in a suit there or in an agreed settlement.

Having a PL policy at home is not the question. The question is whether its territory and jurisdiction clauses include the US.

Five things to check in your policy before you sign

Before you send a COI to a US buyer, check:

1. Is the territory "worldwide", "USA/Canada" or domestic only?

2. Does the jurisdiction clause cover suits and judgments in US courts?

3. Do the named insured and the additional insured match the companies in the contract?

If a US entity signs the vendor agreement or holds the seller account, a policy that names only the parent company in Korea may not fit. See whether you need a US LLC.

4. Is it occurrence or claims-made? If claims-made, what are the retroactive date and the extended reporting period?

5. Do the limits, the deductible and the insurer's rating meet the retailer's terms?

Product liability insurance cost: what industry data shows

There is no list price: your premium is a quote based on product, sales, territory and limits. The figures below are industry data, not quotes.

Insureon data, cited by Real Cost Report (2026): general liability that includes product liability has a median of $42 a month ($500 a year) for retailers and $50 a month ($600 a year) for manufacturers.
Berkley Product Protection, one carrier, sets a $20,000 minimum premium for standalone product liability.

Both describe US businesses; an exporter from Asia may pay a different amount. Korean companies can also look at the Korea Federation of SMEs (KBIZ) PL program, which says its overseas cover costs 20% less than general insurers (KBIZ's own figure).

Add the premium to your channel math. The per-unit results in what's left of $24.99 on each channel do not include insurance yet.

Industry averages are a starting point. Only a quote tells you what your policy will cost.

Korean premium support in 2026 depends on your region

For Korean companies, 2026 support for PL premiums differs by region. The 2026 PL premium support notice on Bizinfo (Ministry of SMEs and Startups, run by KBIZ) gives 10 to 30% of the premium, up to KRW 1 to 2 million, with rates and caps set by each local government.

Busan and Ulsan: up to 20%, capped at KRW 1 million (KBIZ Busan-Ulsan office, March 2026)
South Chungcheong: 30%, capped at KRW 1 million (Bizinfo, May 2026)
Pocheon: 50%, capped at KRW 1 million, for cover in "Korea and overseas" (Pocheon Chamber of Commerce, February 2026)

We found no national 2026 program from KOTRA or K-SURE (Korea Trade Insurance Corporation) for export PL premiums. The 2026 notices came out between February and July, and the July notice on Bizinfo closed on July 24.

Check your own region's notice, and confirm that it supports overseas cover, before you count on the money.

Wrap-up

Once a buyer asks for a COI, insurance decides when you can start selling. A policy from home works in the US only after you have checked its territory, jurisdiction clause and additional insured wording.

LinkONE works with brands entering the US to review what each sales channel and retailer requires before they commit to it.

In the end, what matters is not that you have a policy, but that it contains the terms your retailer asked for.

Frequently Asked Questions

What does product liability insurance cover?

Product liability insurance pays your legal liability when a defect in a product you sold injures someone or damages their property. It does not pay for recalls, repairs or replacements of the product, for fines or punitive damages, or for damage to the product itself (Bigyobigyo). US awards can be large: the 2020 median product liability jury award was $3,908,111 (Triple-I).

Is product liability part of general liability insurance?

Product liability can be part of a commercial general liability (CGL) policy, under products-completed operations, or a separate policy. Walmart's supplier requirements (February 2025) accept either, but ask for product limits by category on top of a $1M/$2M CGL. Check that your policy has no exclusion for your products.

How much does product liability insurance cost?

There is no list price; your premium is a quote based on product, sales, territory and limits. Industry data puts general liability that includes product cover at a median of $42 a month for US retailers and $50 for manufacturers (Insureon data via Real Cost Report 2026). Standalone cover can cost more: Berkley Product Protection sets a $20,000 minimum premium. These are industry figures, not quotes.

What are Amazon's insurance requirements?

As of October 2026, Amazon sellers must buy commercial liability insurance of at least $1M per occurrence and in aggregate within 30 days after monthly sales pass $10,000 (Amazon Seller Central). The deductible must be $10,000 or less, and Amazon.com Services LLC must be an additional insured. From November 2, 2026, sellers in enhanced-safety categories need $1M of cover whatever their sales.

Does a policy from Korea cover US lawsuits?

A policy from Korea covers US lawsuits only if its coverage territory and jurisdiction clause include the US. Korean product liability policies come as Korean-language domestic policies and English-language policies for accidents abroad (Bigyobigyo). Check whether your policy says "worldwide" or "USA/Canada", and whether it covers suits decided in US courts.

Sources

Fees and rules in this post are as of October 2026.

-LinkONE-