Embedded cover is not an image file

This is an epub3 specific problem that often happens in the case of books created using Vellum.

Here's what to do:

1) Download the Sigil ebook editor. It is free, and it works on Mac & Windows as well.
2) Open your epub file (the one generated for you by Vellum) with Sigil.
3) If it shows a warning for you when you open it, simply ignore it (press Close)
4) On the left, look for "images", and find your cover.

5) Right click, and select "Cover image".

6) Go to Tools / Epub3 tools / Generate NCX from Nav

Why is this necessary?

When you open an epub3 file with Sigil, it automatically creates an epub2 standard navigation document to ensure epub3 backward compatibility. Unfortunately, this navigation document is often incorrect. Clicking on the Generate NCX from Nav button will ensure that your book passes epub validation.