Claimed 810,000 yuan, a part puts the seller on the verge of bankruptcy

In recent years, we often see news such as "XX product sold on Amazon has been recalled", and the reason for the recall is mostly "there are safety hazards".

It is true that the manufacturer is primarily responsible for a product safety incident, but sellers and platforms are often not exempt from liability, and when an accident occurs, they often face compensation in the form of real money. Recently, a seller complained that he was sued by a buyer, with the claim amount reaching more than 800,000 yuan. As a platform, Amazon is also a frequent defendant, and once the claim amount was even as high as tens of millions of dollars.

To solve this headache, Amazon came up with the product liability insurance. Amazon's product liability insurance policy has been launched for more than a year. In June, Amazon began to implement the "no deductible insurance" policy. This wave of operations directly ushered in a wave of insurance price increases. However, a seller reported yesterday that the policy has changed again: Amazon will continue to allow the deductible policy. As soon as this news came out, sellers who have already purchased insurance said: "I was cheated!"

Amazon frequently becomes the defendant due to product accidents

At the end of June this year , the U.S. District Court for the State of New Jersey ruled in a case that Amazon is a "seller" under New Jersey's product liability statute and is therefore liable for damages caused by products sold on its platform.

Amazon has been battling product liability claims in recent years, arguing that it is not a "seller" but simply an online marketplace that facilitates sales of products from third-party vendors and therefore cannot be held responsible for product problems.

But consumers and courts clearly don’t think so. According to U.S. District Judge Julian Xavier Niles, Amazon can be sued because even though it has no control over the product itself, it is a party that “otherwise participates in placing the product into commerce.” Consumers think more simply that the product is allowed to appear on the platform with the platform’s permission, and it has control over the products it publishes.

In this context, claims disputes between consumers and Amazon have emerged one after another in recent years, the most famous of which are the "balance car incident" and the "dog leash incident."

In 2015, a balance bike purchased by an American couple caught fire and burned down their $1 million house, while also causing varying degrees of physical and mental injuries to family members. The couple therefore took Amazon to court, demanding it to be responsible for the accident and claiming $30 million in damages.

In 2019, a federal court in Philadelphia ruled that a woman who was blinded by a seller's retractable dog leash could renew her legal case against Amazon. The woman was reportedly blinded when the leash broke while she was walking her dog and the rebounding leash injured her eyes.

There are many similar disputes. For example, last year, a 19-month-old girl accidentally swallowed a lithium-ion battery ejected from a counterfeit remote control, causing permanent damage to her esophagus. Her parents took Amazon to court. In addition, Amazon has also been sued by buyers because of explosions of products sold on the platform that caused personal injury and property damage.

Amazon is of course very worried about the frequent accidents, but sellers who also need to be responsible for product safety issues are also under great pressure.

Buyer's hand cut by hardware, seller sued for $120,000

Jack (pseudonym), a seller of household goods and sports equipment on Amazon, is one of the sellers who had to pay huge compensation.

Jack said that one day, he suddenly received a notice that a consumer had filed a lawsuit against them for the hardware required to install their products. "Through the lawyer, I learned that when the customer was using a ladder to install our product, he fell while holding the hook required to complete the installation. The hook cut his palm, and he was rushed to the hospital for surgery, and his arm was stitched in multiple places."

Jack said helplessly that even though the quality of the hardware was no different from that sold in hardware stores outside, they were still sued by customers for $120,000 (about 810,000 RMB). "The COVID-19 pandemic had just broken out, and our sales were declining rapidly. The company's business was not doing well, and we simply could not pay the money. If we had to pay the fee in the end, the company would have gone bankrupt."

The plaintiff and his wife claimed that they were unable to work after the incident and that the incident caused them "traumatization." "But we found that the 'injured and traumatized' plaintiffs still went to install our products the day after the accident." Jack said that now, especially in the United States, when people do not have medical insurance, they are willing to do anything to get compensation instead of paying out of pocket .

Regardless of whether Jack's company will be ordered to pay $120,000 in damages, since the plaintiff has already paid the jury fees, it means that Jack and his company may have to go to court, which will incur legal fees of $30,000 to $60,000. This is in addition to the amount of the plaintiff's claim, Jack's company needs to pay.

"We have already paid $10,000 in legal fees and $14,000 in medical expenses before going to court." Jack said that the original cost was $30,000, and the final amount of medical expenses was the result of their communication with the plaintiff after many efforts and negotiations.

It is understood that Jack and his three other co-founders have been selling products on Amazon for nearly 10 years, with an annual revenue of approximately US$2 million. However, due to the impact of the epidemic, their business conditions were not ideal, and the sudden arrival of this lawsuit caused by product safety made the situation even worse.

Among these accidents, some were caused by problems with the products themselves, while others were caused by improper use by consumers. But without exception, as long as something happens, the sellers and the platform cannot escape the fate of being held responsible. In this case, the product liability insurance policy launched by Amazon is very important.

The deductible policy was re-implemented, and the sellers said: I was cheated

Sellers all know that Ping An Insurance is one of the insurance companies recommended by Amazon. According to it, some sellers have successfully completed claims. " An electronic product purchased by an overseas consumer from an insured through the Amazon platform exploded while charging on the bed, causing furniture to burn and second-degree burns to people. The final compensation was US$7,605.76, equivalent to RMB 48,567.34. "

Cross-border business itself has more risks and unpredictability than domestic business. In order to add more protection to their business, sellers have gradually purchased insurance for their products. Sellers who have already purchased insurance last year have also been renewing their policies in recent days.

However, a seller reported yesterday that Amazon’s product liability insurance policy has been updated. One seller said that in the email he received, Amazon mentioned that they will continue to provide sellers with a deductible policy , that is , the insurance company will only start to pay claims when the loss exceeds $10,000.

You should know that on June 13, Amazon updated its product liability insurance policy and began to implement a no-deductible policy, which means that as long as a dispute occurs, the insurance company must pay compensation. This directly led to a wave of price increases by insurance companies and increased sales costs for sellers.

Now, less than two months later, Amazon’s policy has changed again. Sellers who purchased or renewed insurance during this period are crying “We’ve been ripped off!”

Amazon said in the email that they will reflect the latest situation on the commercial liability insurance policy in the next few days. Regarding this new change, Yien.com also consulted the relevant personnel of Ping An Insurance, who said that the company has not received any information about the above changes.

Sellers are now paying attention to whether the premium will fall back to the previous price after the policy is updated. Whether the price will fall is still inconclusive, but for sellers, it is very important to choose an insurance company that is recognized by the platform, has reasonable fees, issues orders efficiently, and is convenient and fast in claims. Ping An Insurance is such an insurance company, and its price increase was not large in the last round of price increases.

If sellers want to know the latest updates on premium prices after Amazon’s insurance policy changes, or want to insure or renew their products, please scan /long press to identify the QR code in the poster, or click “Read” below to read the original text.

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