California Importer And Exporter Insurance Policy Information
California Importer And Exporter Insurance. Do you own a business that imports and/or exports products within the United States or to and from other countries?
Exporters arrange the sale of goods produced within the United States to other countries. Importers make arrangements to sell foreign-made goods to United States consumers. They may work solely with one manufacturer or with several.
They do not take physical possession of the goods, which can include any item made for individual or commercial consumers, from small novelty items to motor vehicles.
If so, no matter what industry you're in and what type of goods you handle, just like any other business, you need to make sure that you're properly protected. What's the best way to do that? By ensuring that you have the proper California importer and exporter insurance coverage.
Why do CA importers and exporters need commercial insurance? What type of business insurance coverage do you need? Read on to find out the answers to these questions and more.
California importer and exporter insurance protects your trading company from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
Why Do Importers And Exporters Need Insurance?
Clothing, electronics, literature, vehicles, sporting equipment, food; business owner's import and export all types of products, both domestically and internationally. When it comes to handling products, no matter how many precautions you take, there's always a chance that something could go wrong.
For instance, an entire shipment could become lost in transit or part of a shipment could become damaged, your goods could potentially damage somebody else's property, or an employee or third-party could become injured while moving the products you are importing or exporting.
As the owner and operator of your business, you are liable for anything that goes wrong. The cost of replacing products that are damaged in transit, repairing damaged property, or covering someone's medical expenses can be exorbitant.
That's why it's so important to invest in the right type of California importer and exporter insurance coverage.
If you aren't insured and any of the above-mentioned hypothetical situations were to occur, you would have to cover the related expenses out of your own pocket. The cost of replacing an entire shipment or repairing someone's property could cost 10s of thousands of dollars, if not more. If you had to pay those types of expenses on your own, there's a chance that your business could experience serious financial hardship.
If, however, you were to experience any of the above-mentioned hypothetical situations and you were properly insured, your carrier - not you - would pay for the related expenses. In other words, having the right type of insurance coverage can help you avoid serious monetary losses.
In addition to the financial protection that California importer and exporter insurance provides, having the appropriate coverage also ensures that your business is in compliance with the law. In most locations, insurance is a legal requirement for importers and exporters. As such, if you aren't properly insured, you could end up facing serious fines or even lose your business.
What Type Of Insurance Do Importers And Exporters Need?
There are several types of insurance coverage business owners who import and/or export products should carry. The specific types of coverage you will need to carry depend on a number of factors, including where your operations are located, where you import products from and export products to, and the size of your business; among other things.
With that said, however, the following are examples of California importer and exporter insurance policies that all importers and exporters should carry:
- Cargo Insurance: There are two types of cargo insurance: land and marine. The type you'll need depends on how your products are imported or exported. If you're products are shipped via land transportations, such as trucks or other utility vehicles, you'll need to carry land cargo coverage and if your products are shipped via sea or air, you'll need marine cargo coverage. Both types of cargo insurance protect goods from any damage, theft, or other losses that may occur while they are in transit.
- Commercial General Liability: This coverage protects you from third-party injury and property damage claims. For instance, if a vendor were to trip and fall while making a delivery to your warehouse, this insurance would cover the cost of any necessary medical care and legal expenses that you may incur.
- Commercial Property: This policy will protect the properties that are used for business-related purposes - a retail store or a warehouse, for example - from losses that are associated with acts of nature, theft, or vandalism.
- Workers' Compensation: If any of your employees suffer work-related injuries or illnesses, this policy will cover their medical expenses and provide them with compensation for missed wages if they are unable to work.
These are just a few examples of the type of coverage that CA importers and exporters should carry, you might need more based on your specific operations.
CA Importer's & Exporter's Risks & Exposures
Premises liability exposure is limited to that of an office with very limited public access. There may be considerable international exposure if the owner and/or employees are in other countries for a significant length of time meeting with clients. An international liability policy may be required to adequately protect the firm for actions outside the United States.
Products liability exposure is very high for both exporters and importers of foreign goods. If products are from foreign manufacturers, liability may be increased to that of a manufacturer, particularly if the manufacturer does not have a U.S. policy.
An exporter or importer may need an international products liability policy to provide adequate coverage. The importer or exporter should request copies of policies from each manufacturer with whom they do business to determine the extent of coverage provided.
Hazards depend on the type of products sold, the warranties, advertising, commitments, and promises made by the importer or exporter.
Workers compensation exposure is generally limited to office and travel hazards. When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome. All workstations should be ergonomically designed.
Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals. Salespersons can be injured on the road, while flying, or while making calls overseas. Foreign voluntary workers compensation may be needed if out-of-country travel is more than incidental.
Property exposures are minimal if the importer/exporter acts only as a commission merchant and takes no physical possession of the product. Generally, there is an office and some salespersons' samples. Ignition sources would be limited to electrical wiring, heating and air conditioning systems.
Inland marine exposure is from accounts receivable if the importer or exporter offers credit to customers, computers for tracking sales, salespersons' samples for goods used in product demonstrations, and valuable papers and records for manufacturers' and customers' information.
Although the importer or exporter may arrange for shipment, they will not take possession of the goods, so they have no goods in transit exposure.
Crime exposure is from employee dishonesty. Background checks, including criminal history, should be performed on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements. Regular audits, both internal and external, are important to prevent employee theft of accounts.
Since international banking can be involved, the audit of the books should be more extensive due to the opportunity for unusual transactions or diversions, including offshore banking.
Commercial auto exposure is moderate for the salespersons' fleet. There should be a written policy on personal and permissive use of any vehicles provided to employees. MVRs must be ordered on a regular basis. Vehicles must be well maintained with records kept at a central location.
Importer And Exporter Insurance - The Bottom Line
To find out exactly what type of California importer and exporter insurance coverage you need, speak with an experienced agent that specializes in commercial insurance.
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 2021.
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 2021.
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 Manufacturing Insurance
Read informative articles on wholesale distribution insurance. Distributors and wholesalers face specific risks including fire, flood and weather damage that can destroy products in the distribution center - and every part of the supply chain including late supplier shipments to unpaid invoices - can effect the entire operation.
- Air Conditioning And Heating
- Audio And Video Equipment
- Beer & Ale
- Cameras & Musical Instruments
- CDs, DVDs And Videos
- Dairy Products
- Dry Goods
- Electrical Appliances
- Electrical Equipment
- Electrical Supplies
- Electronic Equipment
- Greeting Cards
- Importer & Exporter
- Liquor Wholesaler
- Manufacturers Representative
- Motion Picture
- Plate Glass
- Plumbing Supplies
- Restaurant Equipment
- Roofing Materials
- Seed Merchants
- Theatrical Supplies
- Wholesale Florist
- Wholesaler Distributor
Wholesale and distribution operations have many of the same physical damage and property coverage concerns as warehouse operations. In both, the value of both real property and stocks of merchandise is very high. Loss control and other techniques appropriate to the types of merchandise involved are needed. For these reasons, adequate and appropriate property insurance coverages are important.
Managing inventories, equipment and facilities can expose your wholesale distribution operations to some specific and unique risks.
The commercial auto exposure can also be significant, based on the extent of merchandise delivery. In addition, transportation or motor truck cargo insurance on the merchandise must also be arranged.
Employee theft is always an issue and can be a significant exposure, depending on the type of property involved. Finally, the types of merchandise and material handled makes workers compensation insurance another very important coverage.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Accounts Receivable, Computers, Contractors' Equipment, Goods in Transit, Valuable Papers and Records, Employee Dishonesty, General Liability, Employee Benefits, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Signs, Computer Fraud, Forgery, Money and Securities, Cyberliability, Employment-Related Practices and Stop Gap Liability.
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