California Cold Storage Insurance Policy Information
California Cold Storage Insurance. Cold storage is a vital part of the supply chain. These facilities are used to keep perishable goods refrigerated or frozen, ensuring that they remain safe and allowing without putting the integrity of the foods at risk of spoiling.
Cold storage plants offer long- and short-term storage of goods of others in climate-controlled freezers, coolers, or refrigerators. Goods stored can include such items as dairy products, flowers, fruit, furs, meat, poultry, seafood, and other fresh or frozen foods.
Goods may be brought to the facility by customers, by trucks, railcars, or barges, or the warehouse may offer packaging and transportation services. Those specializing in food products are regulated by the federal Food and Drug Administration (FDA), which can make inspections at any time.
If you're the owner and operator of a CA cold storage facility, it's safe to say that you provide an invaluable service to the businesses that rely on your business owners, as well as the public at large. While you do your best to ensure that everything surrounding your business functions properly, there is always a chance that something unexpected could happen.
If unforeseen situations do arise, you are liable for the costs that are associated with them. To protect yourself from potential financial losses, investing in the right type of insurance coverage is an absolute must.
Why is cold storage insurance so important for the owners and operators of cold storage facilities? What type of insurance coverage do you need to carry? Read on to find the answers to these questions and more.
California cold storage insurance protects your plant or facility from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Why Do Cold Storage Facilities Need Insurance?
Like other businesses, the owners of CA cold storage facilities face numerous risks. Some of those risks are similar to the risks that all business owners face, and some are unique to this specific industry.
Your facility could be damaged by an act of nature, such as a fire or a flood, vandalism, or theft. An employee of your facility could sustain a work-related injury. Your refrigeration equipment could break down and the goods you store could spoil. A third-party - a client or a vendor - could file a lawsuit against you.
These are just a few of the different types of scenarios that could occur, and if they do, you are responsible for the related costs; repairs to your facility or equipment, legal defense and settlement fees, etc. As you can imagine, the costs that are associated with any of the issues that may arise can be exorbitant and you could face serious losses that have the potential to be financially devastating.
That's why it's so important to invest in the right type of California cold storage insurance coverage. In the event that something does go wrong and you're properly insured, instead of having to pay for the related expenses yourself, your insurer will cover them for you.
In addition to the financial protection that insurance provides, CA cold storage plant operators are required to carry certain types of coverage. If you fail to carry the required coverages, you could face serious fines and may even end up losing your entire business.
What Type Of Insurance Do Cold Storage Plants Need?
There are several types of California cold storage insurance coverages that cold storage plants need to carry. The specific type of coverage depends on several factors that are unique to your specific business; where your facility is located, the size of your operation, the kind of goods you store, etc.
That's why it's so important to consult with an experienced agent who specializes in commercial insurance, as an agent will be able to help you develop a comprehensive policy that will provide you with the coverage that you need to properly protect your operation.
With that said, here's a look at some of the most essential forms of California cold storage insurance that are needed:
- Commercial Property - This kind of coverage protects your commercial property and the contents within it from numerous perils, including acts of nature, theft, or vandalism.
- General Liability - To protect yourself from third-party personal injury and property damage liability, you'll need to carry general liability insurance, as it covers legal defense fees and any settlements that you may be required to pay in the event that someone files a lawsuit against you.
- Equipment Breakdown - In the event that any of the equipment you rely on to keep your cold storage facility operating breaks down, equipment breakdown insurance will help to cover the cost of repairing or replacing the equipment.
- Workers Compensation - If one of your employees suffers a work-related injury, workers' comp will help to cover the cost of their medical bills and will reimburse them for any income they lose if they are unable to work while they are recovering.
These policies types are just a few examples of the California cold storage insurance coverage you should consider for your facility.
CA Cold Storages' Risks & Exposures
Premises liability exposure is generally limited due to the lack of public access. Customer access should be limited to waiting areas, which should be kept clean, dry and free of obstacles. Proper attention to housekeeping is needed to prevent trips, slips, and falls.
There should be a disaster plan in place for unexpected emergencies. Contracts with transportation and storage providers may expose the operation to additional liability.
The plant may have a railroad sidetrack or dock. An employee should verify that no one is in the path of an incoming or outgoing train. Railroad tracks and conveyors can be attractive nuisances. The premises should be enclosed by fencing with "No Trespassing" signs posted.
Environmental impairment exposure due to ammonia and other refrigerants can be high as an accidental release can pollute air, land, or water. All tanks and pipes should be routinely tested for leakage. Spill procedures must be in place to contain any accidental discharge of contaminants.
Record keeping is critical. Contracts should be in place to dispose of all environmentally dangerous chemicals. If there are underground storage tanks, a UST policy will be required.
Workers compensation exposure is very high. To avoid frostbite and hypothermia resulting from exposure to sub-zero temperatures, the length of time spent in refrigerated areas must be limited, and protective clothing required. Freezers should have emergency exits to prevent an employee from being trapped inside.
Ongoing noise from refrigeration fans and other machinery can impair hearing. Back injuries such as hernias, sprains, and strains can result from lifting. Workers should be trained in proper lifting techniques and have conveyances available. Continual standing can result in musculoskeletal disorders of the back, legs, or feet.
Forklift operators must be properly trained. Shelving must be stable to prevent stored goods from falling onto workers. Leaking ammonia is a serious health hazard that can lead to lung damage or even death. Protective breathing equipment must be available for cleaning up leaks.
Floor coverings or coatings may be slick and accumulate condensation, posing slip and fall hazards. Housekeeping is critical. When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome.
Electrical shocks, cuts, and burns are hazards to repair or service employees. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. If the warehouse has a dock for loading onto barges, it may need U.S. Longshore and Harbor Workers coverage in addition to workers compensation.
Property exposures are high. Ignition sources include extensive electrical wiring, refrigeration equipment, and heating and air conditioning systems. The combination of faulty or inadequate electrical wiring and equipment malfunctions, open construction, and large quantities of combustible materials can lead to a severe loss.
All wiring must be up to code and adequate for the operations performed. Equipment must be inspected and maintained on a continuing basis. Ammonia leaks could cause an explosion. Detection and alarm systems should be in place.
Ammonia pipes should run outside the building to prevent accidental collision with forklifts inside the building and have impact barriers around them to prevent contact with vehicles. Emergency shut-off valves must be in place, and exhaust systems available to allow venting in the case of a leak.
Good housekeeping and fire controls are critical. Smoking should be prohibited.
If there is a sprinkler system, heads must be located high enough to avoid accidental contact with forklifts, but with enough clear space from storage facilities to allow unobstructed operation in the event of a fire.
Forklifts should be refueled in a separate, ventilated area away from combustibles. Stored products may be a target for thieves. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Business income and extra expense exposures are high. Recovering from a loss could require a lengthy time to rebuild the facility and purchase replacement refrigeration equipment.
Equipment breakdown exposures are high as temperatures for refrigeration equipment must remain constant. All equipment must be inspected and maintained on a regular basis. Back-up generators should be available.
Inland marine exposures include accounts receivable if the warehouse bills customers, computers for tracking inventory, contractors' equipment, valuable papers and records for customers' and suppliers' information, and warehouse operators' legal liability.
Contractors' equipment includes forklifts, cherry pickers, and hand trucks used for moving stored items. Warehouse operators' legal liability will depend on the contract between the facility and its customers, which should spell out who is responsible for damage to stored goods.
Additional coverage for spoilage and ammonia contamination should be considered as even a small power interruption could result in all frozen goods being condemned as unfit for consumption or sale. Duplicates must be kept of all data to permit easy replication in the event of a loss. Goods in transit coverage will be needed if the operation includes pickup and delivery of customers' goods.
Crime exposure is from employee dishonesty. Pre-employment background checks, including criminal history, should be performed on all employees handling money. Cold storage operations involve a number of transactions and accounts that can be manipulated. Loading docks should be supervised to minimize employee theft of goods. There must be a separation of duties between employees handling deposits and disbursements and reconciling bank statements. Regular audits, both internal and external, are important in order to prevent employee theft of accounts. Receipts must be provided for all payments and compared to money received.
Commercial auto exposure can be high if pickup or delivery services are provided. All drivers must be well trained and have valid licenses for the type of vehicle being driven. MVRs must be run on a regular basis.
Random drug and alcohol testing should be required. Vehicles must be well maintained, including refrigeration systems, with records kept at a central location.
California Cold Storage Insurance - The Bottom Line
To find out more about the specific kinds of California cold storage insurance policies you'll need, how much coverage your plant needs - speak with an experienced insurance agent who understands the cold storage business.
California Economic Data, Regulations & Limits On Commercial Insurance
If you are an entrepreneur and you considering having your operations located in California, it's essential that you have a full understanding about the economy of the state, as well as the regulations and limits that are in place for commercial insurance.
If you are considering opening up a business in the Golden State, you first want to make sure that it is a sound location for your operations. That means that you should understand some key information related to the state's economy, as well as the types of insurance coverages that businesses are legally required to carry.
Economic Trends For Businesses In California
In terms of job creation, the state of California exceeds rate of job growth in the United States; however, as the state's metropolitan areas are reaching employment capacity, job growth is starting to slow. In 2017, the rate of growth was 2.1 percent, which is the slowest rate of growth since 2011; but it is still expected to increase by 1.8 percent by the end of 2018, and 1.2 percent by the end of 2022.
In the month of April, the unemployment rate in California dropped to 4.2 percent, which is a record low. This unemployment rate is expected to remain consistent for the rest of the calendar year; however, it's forecasted that the rate will start to increase in 2022.
The strongest labor market in the state is in the Bay Area, where the unemployment rate was 3.4 percent in 2017. Southern California follows, with an unemployment rate of 4.5 percent in 2017. In the Central Coast region, the rate was 5.4 percent and in the Central Valley, it was 6.6 percent. While the unemployment rate is considered high in these areas, they have decreased dramatically over the last 12 month period.
The industries that are expected to see the most growth in CA include:
- Information Technology
CA Commercial Insurance Regulations And Limits
The California Department of Insurance regulates insurance in the Golden State. In the state of CA, commercial liability insurance is not required; however, since the state does not cap rewards for liability law suits, business owners are wise to invest in this type of coverage. The amount of coverage recommended varies depending on the size of the business and in the industry.
Workers' compensation insurance is the only type of coverage that business owners are required to have. This applies to any organization that employs a salaried or hourly staff, even if that staff only consists of one employee. Furthermore, if an employee is injured or becomes ill as a result of work, business owners must pay for CA workers' comp benefits.
Additional Resources For Warehouse And Storage Insurance
Learn about small business warehouse and storage insurance - which protects storage and warehouse facilities and protects their inventory from property damage from fire and weather, vandalism and theft and liability coverage as well.
The purpose of your operation is to store & secure and other businesses' property, your also have to protect your own. Warehouse and storage commercial property insurance, you can protect your buildings, their contents and other people belongings, and other structures from damage due to fire, weather, smoke, theft, and other causes of loss.
Warehouse business property insurance protects your assets, including office equipment, computers, furniture, tools, and equipment.
And Like other warehouses, you may also need warehousemen legal liability insurance. Warehouse legal liability insurance, which should be carried by every 3rd party warehousing company, says that the facility or plant is responsible for the safe storage of your goods and products - and they must provide "reasonable care" to your goods while under their care.
Warehouse legal liability coverage is special because it protects the physical products and goods that belong to someone else, under the storage facility's care, custody and control.
Warehouses should also have a commercial general liability insurance policy. CGL protects against third-party bodily injury & property damage and the legal costs associated with defending against lawsuits.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Contractors' Equipment, Valuable Papers and Records, Warehouse Operators' Legal Liability, General Liability, Employee Benefits, Umbrella, Hired and Non-Owned Auto and Workers Compensation
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Goods in Transit, Cyberliability, Employment-related Practices, Environmental Impairment, Business Automobile Liability and Physical Damage, Stop Gap Liability and U.S. Longshore and Harbor Workers Coverage
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