Understanding Liability and Coverage in Amazon Relay Insurance

When participating in Amazon Relay as an independent contractor or fleet owner, understanding the different types of liability and coverage requirements is critical to ensure both compliance with Amazon’s standards and the protection of your business.

As a Relay driver, you are responsible for transporting goods for Amazon, but this responsibility comes with risks, including accidents, property damage, theft, or injuries. Insurance acts as a safeguard against these risks, providing protection for both you and Amazon, and ensuring that you can manage financial losses in case of unforeseen events.

In this article, we’ll break down the key aspects of liability and coverage in Relay insurance, explaining what each type of coverage means, why it’s important, and how to ensure that you meet the program’s insurance requirements.

What is Amazon Relay?

Amazon Relay connects independent truck drivers, owner-operators, and fleets with Amazon’s logistics network. This allows drivers to transport goods between Amazon’s warehouses, fulfillment centers, and delivery stations and is a vital part of Amazon’s supply chain operations. The program offers flexibility and independence to drivers, but it also requires that all participating contractors maintain specific insurance coverage to protect both the drivers and Amazon.

The Importance of Liability Insurance in Amazon

Liability insurance is a fundamental part of Relay’s insurance requirements. Liability insurance protects the driver and other parties from financial responsibility in case of accidents, injuries, or property damage. As an Amazon Relay contractor, you must have the appropriate liability coverage to ensure that you can handle potential financial liabilities arising from your trucking operations.

There are several types of liability coverage involved in Amazon insurance requirements, including commercial auto liability, general liability, and umbrella liability insurance. Below, we’ll look at each type of coverage in more detail.

1. Commercial Auto Liability Insurance

Commercial Auto Liability Insurance is perhaps the most important type of coverage for Relay drivers. This coverage protects you from financial responsibility if you are at fault in an accident that causes injury or property damage to other people or their property.

There are two primary components of commercial auto liability insurance:

Bodily Injury Liability: This covers medical expenses, lost wages, and legal fees if you are at fault in an accident that injures someone else. It can help pay for the treatment of injured parties, even if they are not in your vehicle.

Property Damage Liability: This covers the costs associated with repairing or replacing property that you damage while driving, such as other vehicles, buildings, or infrastructure.

For Relay, the minimum requirement for commercial auto liability insurance is $1 million per accident. This is designed to cover the potentially high costs of accidents that result in severe injury or significant property damage.

2. General Liability Insurance

While commercial auto liability insurance covers accidents on the road, General Liability Insurance protects accidents or damages that may occur in other circumstances related to your business. This includes incidents that occur at your business location, such as a slip-and-fall accident on your premises or property damage caused by your operations outside of driving.

General liability insurance is important because it protects you from claims made by third parties for bodily injury or property damage that arise from activities unrelated to driving.

For example, if you have employees or work in an office, general liability insurance can cover incidents such as a customer being injured at your business location or property being damaged by a third party due to your operations.

The minimum coverage requirement for general liability insurance under is typically $1 million per occurrence. It’s essential to note that this coverage is separate from your commercial auto liability insurance, meaning it applies to different situations and events.

3. Physical Damage Insurance

While liability insurance covers damage to others and their property, Physical Damage Insurance provides coverage for damage to your truck, trailer, or other equipment. This type of coverage is especially important if you’re an owner-operator and want to protect your investment in your vehicle.

Physical damage insurance covers the cost of repairing or replacing your truck or equipment if it’s involved in an accident, stolen, or damaged in other ways. This could include damage caused by a collision, vandalism, theft, or severe weather.

For drivers, physical damage insurance is required to ensure that the vehicles used in transporting goods are covered in the event of damage. The coverage amount typically varies based on the value of the vehicle and equipment, but $100,000 is a common minimum requirement for Relay participants.

4. Cargo Insurance

Cargo Insurance is an essential type of coverage in Amazon, as it protects the goods being transported from damage, loss, or theft during transit. As a Relay driver, you are responsible for the safety and protection of the cargo you’re hauling. If the cargo is damaged or stolen while in your care, cargo insurance helps cover the costs.

Cargo insurance protects against losses that could occur due to accidents, natural disasters, or theft. Without this insurance, you would be financially responsible for replacing or repairing the goods in question, which could be a significant financial burden.

Amazon Relay typically requires a minimum of $100,000 in cargo insurance coverage to protect the shipments you’re transporting.

5. Workers’ Compensation Insurance (If Applicable)

If you have employees working for your business (such as other drivers or staff), you may need workers’ compensation insurance to cover their medical expenses and lost wages if they are injured while working. This insurance is designed to protect employees and prevent lawsuits resulting from workplace accidents.

While workers’ compensation insurance is not typically required for independent owner-operators in the Relay program (since they are not employees), it is mandatory if you employ other individuals in your business. Each state has different rules regarding workers’ compensation, so be sure to check the regulations for your location.

Conclusion

Insurance is a vital component of operating under Amazon Relay, as it protects both drivers and Amazon from potential financial losses due to accidents, property damage, or injuries. By ensuring you have the right coverage—commercial auto liability, general liability, physical damage, cargo insurance, and umbrella coverage—you can mitigate risks and run a successful, compliant business. Always stay up-to-date with your insurance and keep your documentation current to continue participating in the program.