Amazon will pay shoppers that suffer from injuries or property damage from defective products sold by third-party sellers on its platform.
The company has been the target of various litigations for defective products sold on its platform. However, Amazon has maintained that sellers are responsible for the sale of such products and not the platform itself.
“If you purchase any of the products or services offered by these businesses or individuals, you are purchasing directly from those third parties, not from Amazon,” according to Amazon’s terms and conditions.
“Amazon does not assume any responsibility or liability for the actions, product, and content of all these and any other third parties.”
Courts supported Amazon’s position on the matter up until last year when a state appellate court in California ruled that Amazon could be held liable for products stored and shipped by its Fulfillment by Amazon program.
The reversal in Amazon’s policy follows that ruling and it will likely result in fewer litigations from its customers. Starting September 1, 2021, the company will pay shoppers up to $1000 in damages for valid claims at no cost to sellers. Currently, more than 80 percent of injury and damage claims are for $1000 or less. The company will also step in if sellers are unresponsive.
“This streamlined process will save time, money, and effort for both customers and sellers,” Amazon noted about its new “A-to-z Guarantee.”
The company also announced the launch of Amazon Insurance Accelerator, which is a network of providers that sellers can choose to leverage. Going forward, the company will also require more merchants on its platform to obtain product liability insurance.