Wholesalers And Distributors Insurance FAQ

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Get answers to small business insurance frequently questions including costs, coverages, minimum requirements, certificates & more.

Types Of Small Business Insurance

  • Includes medical payments, legal representation, and defense against libel and slander accusations.
  • Provides financial protection if an employee has a job-related accident or illness.
  • Bundles general liability insurance and commercial property into one affordable policy.
  • Pays to repair or replace your business property if it's stolen, damaged, or destroyed in a fire or natural disaster.
  • Covers mistakes or alleged mistakes on your part (errors) & failures or alleged failures to perform a service (omissions).
  • Is liability and physical damage protection for vehicles, such as cars, trucks and vans, that are used for business.
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Frequently Asked Questions About Small Business Insurance

How much does general liability insurance cost?

In 2019, commercial general liability costs can vary widely based on industry. Businesses in higher risk industries pay more. Premiums are also determined by zip code and often payroll and/or gross sales. You can request a free quote to get an exact premium for your business. Read more...

What types of business insurance do I need?

Almost every business needs general liability and commercial property insurance at the very least. If you have any non-owner employees, you'll most likely need workers compensation insurance too as most state require it. It all depends on the risks your business faces. Read more...

How does general liability insurance work?

Having general liability is the basis of any business insurance program. If you can afford only one commercial insurance policy for your small business - then you should get a commercial general liability policy, because it offers protection against a wide range of common but unexpected risks. Read more...

What is a Certificate of Insurance?

A Certificate of Insurance (COI) is proof of coverage. It verifies that you have insurance coverage for your small business, & contains information on types and limits of coverage, insurance company, policy number, named insured, and the effective date of the policy. Read more...
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Wholesalers And Distributors Insurance FAQ Information

Wholesalers And Distributors Insurance FAQ

Wholesalers And Distributors Insurance FAQ. 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.

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.

We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Wholesalers And Distributors Insurance FAQ.

Read the Wholesalers And Distributors Insurance FAQ to learn what type of commercial insurance coverages are right for your business - including liability, property, workers compensation and other specialty policies.

What Is A Wholesaler Or Distributor?

According to Chron, "The distributor is the manufacturer's direct point of contact for prospective buyers of certain products. Wholesalers buy a large quantity of products directly from distributors."

Wholesalers And Distributors include - but are not limited to - the following types of businesses:

  • Air Conditioning and Heating
  • Audio and Video Equipment
  • Beer and Ale
  • Beverage
  • Cabinets
  • Camera and Musical Instrument
  • Candy
  • CD
  • DVD and Videos
  • Clothing
  • Coffee Dealers
  • Commission Merchants
  • Confectioners
  • Dairy Products
  • Drugs
  • Dry Goods
  • Electrical Appliances
  • Electrical Equipment
  • Electrical Supplies
  • Electronic Equipment and Instruments
  • Envelopes
  • Exporters and Importers
  • Extract
  • Florists
  • Food Brokers
  • Fruit
  • Furniture
  • Furriers
  • General Merchandise
  • Gifts
  • Glass-Plate
  • Glassware
  • Greeting Cards
  • Grocers
  • Hardware
  • Jewelers
  • Lamp
  • Liquor
  • Lumber Yards
  • Meat
  • Motion Picture Distributors
  • Novelties
  • Paint
  • Petroleum
  • Restaurant Equipment
  • Roofing Materials
  • Rugs
  • Seed Merchants
  • Shoes
  • Stationers
  • Theatrical Supplies
  • Tires
  • Tools
  • Toys
  • Wallpaper

You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.

Types Of Wholesalers And Distributors Insurance Policies

Following are some suggested commercial policies and coverages applicable for wholesaling and distributing:


Package policies are the most convenient and cost effective way to combine a number of coverages in one policy. For some operations in this category, the businessowners policy may be the best choice for eligible businesses willing to exchange some coverage flexibility for reduced premiums.

Types Of Wholesalers And Distributors Package Policies:

  • Businessowners Policy (BOP)
  • Commercial Package Policy (CPP)

Inventory represents the largest property value for most wholesalers. Many wholesale operations have periods when these values increase dramatically and should consider the peak season or value reporting options to prevent underinsurance.

Business income is an important coverage need and business income from dependent and secondary dependent properties coverage should be considered in cases where the insured has only a few suppliers or customers.

Types Of Property Coverages:

  • Building
  • Business Personal Property
  • Personal Property of Others
  • Improvements and Betterments

Coverage on goods in transit and electronic data processing coverages are probably the most important inland marine coverages for most wholesalers. They transport and deliver most of the goods they sell and rely heavily on computers for most of their transactions and operations.

Specialty inland marine coverage forms have been created for specific dealers and should be considered in lieu of commercial property coverage forms.

Types Of Inland Marine Coverages:

  • Accounts Receivable Coverage
  • Camera and Musical Instrument Dealers Coverage
  • Contractors Equipment Coverage
  • Difference in Conditions (DIC) Coverage
  • Electronic Data Processing Equipment Coverage
  • Fine Arts Coverage
  • Fine Arts Dealers Coverage
  • Goods In Transit
  • Signs Coverage
  • Valuable Papers and Records Coverage

Losses due to employee theft are almost always the primary crime coverage concern. However, computer and funds transfer fraud may also be major loss and coverage concerns because most invoices and billings are handled electronically. Fraudulent impersonation coverage can be very important because of potential losses due to trickery.

Types Of Crime Coverages:

  • Computer and Funds Transfer Fraud Coverage
  • Employee Theft Coverage
  • Forgery or Alteration Coverage
  • Inside The Premises-Theft of Money and Securities Coverage
  • Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
  • Money Orders and Counterfeit Money Coverage
  • Outside The Premises Coverage

Most wholesale operations do not have significant exposures that require surety bonds. However, some types of surety bonds may be required, depending on the nature of their contracts with others or their involvement with governmental entities.

Types Of Surety Coverages:

  • Miscellaneous Surety Bonds

The premises and products liability loss exposures are usually limited, except in cases where the operation imports products directly. With direct importing, the wholesaler becomes more like a manufacturer with respect to any products-related losses or damage.

Wholesalers that distribute alcoholic beverages need separate liquor liability coverage because they are subject to the liquor exclusion in the CGL.

Types Of Liability Coverages:

  • Claims-Made to Occurrence Coverage
  • Commercial General Liability (CGL) Coverage
  • Employee Benefits Liability Coverage
  • Employment-Related Practices Coverage
  • Liquor Liability Coverage
  • Owners and Contractors Protective (OCP) Liability Coverage
  • Product Contamination Insurance
  • Product Recall or Product Withdrawal Expense Coverage
  • Railroad Protective Liability Coverage
  • Special Events Liability Coverage

The commercial auto exposure can be significant, depending on the extent of delivery of goods to customers. If the wholesaler has no delivery operations, the exposure may not be more than a salesperson's private passenger fleet.

Types Of Business Auto Coverages:

  • Auto Medical Payments
  • Business Auto Coverage
  • Collision Coverage
  • Comprehensive Coverage
  • Garagekeepers Coverage
  • Hired & Non-owned Auto Coverage (HNOA)
  • Uninsured/Underinsured Motorists Coverage

Employers are required to provide coverage for on-the-job injuries sustained by their employees through a workers compensation policy. Automation in many wholesale operations has dramatically reduced the number of employees but workers compensation coverage is still required for those that remain.

If the wholesale or distribution operation is located in a coastal area or along navigable waters, and workers load and unload ships or other vessels, Longshore and Harbor Workers' Compensation Act coverage is also required.

Types Of Workers Comp Coverages:

  • Excess Workers Compensation Self-Insurance Bonds
  • Longshore and Harbor Workers' Compensation Act Coverage
  • Stop-Gap or Employers Liability Coverage
  • Workers Compensation and Employers Liability Coverage

The increased limits needed are based on the types of products handled and distributed along with the contractual relationship of the wholesaler with its suppliers and customers. Higher limits are particularly important if the insured directly imports any products or does any repackaging.

Types Of Excess Liability Coverages:

  • Excess Liability Coverage
  • Umbrella Coverage

Air cargo transportation may occasionally be needed, depending on individual transportation circumstances, customer requirements or emergency situations that arise from time to time.

Types Of Aviation Coverages:

  • Air Cargo Coverage

Ocean cargo insurance should be considered for goods the wholesaler ships overseas. Because the policy has war risk exclusions for certain geographical areas, the status of countries to which the goods are shipped must be reviewed and war risk coverage considered if available.

Types Of Ocean Marine Coverages:

  • Ocean Marine Cargo Coverage
  • Ocean Cargo War Risk Coverage

Depending on the unique features or peculiar characteristics of their operations, some wholesalers may have unusual exposures. One or more of the following coverages may be appropriate:

Types Of Specialty Coverages:

  • American Expatriate Coverage
  • Business Legal Expense Coverage
  • Commercial Credit Coverage
  • Cyber Liability Coverage
  • Data Security Breach Coverage
  • Directors and Officers Liability Coverage
  • Environmental Impairment Liability Coverage
  • Export Credit Insurance Coverage
  • Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
  • Identity Theft Insurance Coverage
  • International Insurance Coverage
  • Patent Infringement Liability Coverage
  • Risk Retention Group Liability Coverage
  • Solar Energy System Coverage
  • Tax Liability Coverage
  • Terrorism Insurance Coverage
  • Transportation Brokers Contingent Cargo Coverage
  • Underground Storage Tank (UST) Liability Coverage
  • Unmanned Aerial Vehicles (UAV) (Drones)

Wholesalers And Distributors Insurance FAQ - The Bottom Line

There are many commercial insurance policies available for Wholesalers And Distributors. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring wholesaling and distributing businesses.

Frequently Asked Questions By Industry

Learn about the coverages available for specific industires with the Insurance FAQs below:

Wholesalers And Distributors Insurance FAQ
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