Importer And Exporter Insurance Policy Information
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 importer and exporter insurance coverage.
Why do 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.
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.
Below are some answers to commonly asked export and import insurance questions:
- What Is Importer And Exporter Insurance?
- How Much Does Importer And Exporter Insurance Cost?
- Why Do Importers And Exporters Need Insurance?
- What Type Of Insurance Do Importers And Exporters Need?
- What Does Importer And Exporter Insurance Cover & Pay For?
What Is Importer And Exporter Insurance?
Importer and exporter insurance is a type of insurance coverage that protects businesses involved in the import and export of goods from various risks and uncertainties associated with international trade. It provides coverage for a wide range of risks, including loss or damage to goods in transit, financial loss due to non-payment or default by the buyer, and loss or damage to the cargo caused by events such as theft, fire, natural disasters, or war.
The purpose of this insurance is to minimize the financial losses incurred by the importer or exporter and help to ensure the smooth and successful completion of international trade transactions.
How Much Does Importer And Exporter Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small exporters and importers ranges from $57 to $79 per month based on location, type of goods, sales claims history and more.
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 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 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 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 importers and exporters should carry, you might need more based on your specific operations.
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.
What Does Importer And Exporter Insurance Cover & Pay For?
Importers and exporters can face various legal issues, leading to lawsuits. Some common reasons include breach of contract, product liability, intellectual property infringement, and customs violations. Insurance policies like marine cargo insurance, general liability insurance, and intellectual property insurance can protect businesses against the financial impact of such lawsuits.
Breach of contract: If an importer or exporter fails to fulfill their contractual obligations, they can be sued by the other party. Trade credit insurance can protect businesses from financial losses resulting from a buyer's failure to pay or the supplier's inability to fulfill the order. In case of a lawsuit, the insurance can cover legal expenses, settlements, or judgments.
Product liability: Importers and exporters can be held liable for injuries or damages caused by defective products. Product liability insurance covers the costs of legal defense, settlements, and judgments in such cases. This insurance helps businesses pay for the lawsuit if they are found to be at fault for a product defect.
Intellectual property infringement: Importers and exporters can be sued for infringing on patents, trademarks, or copyrights. Intellectual property insurance covers the legal costs associated with defending against such claims and can help pay for any judgments or settlements.
Customs violations: Importers and exporters are required to follow customs regulations, and failure to do so can result in fines, penalties, or legal action. Customs bonds or customs liability insurance can protect businesses from the financial impact of customs violations. The insurance can cover the costs of fines, penalties, and legal defense fees in case of a lawsuit.
By obtaining appropriate insurance coverage, importers and exporters can protect their businesses from the financial burdens of lawsuits and ensure their operations run smoothly.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5099 Durable Goods, Not Elsewhere Classified, 5199 Nondurable Goods, Not Elsewhere Classified
- NAICS CODE: 423990 Other Miscellaneous Durable Good Merchant Wholesalers, 424990 Other Miscellaneous Nondurable Goods Merchant Wholesalers
- Suggested Workers Compensation Code(s): 8018 Store - Wholesale - NOC
5099: Durable Goods, Not Elsewhere Classified
Division F: Wholesale Trade | Major Group 50: Wholesale Trade-durable Goods | Industry Group 509: Miscellaneous Durable Goods
5099 Durable Goods: Establishments primarily engaged in the wholesale distribution of durable goods, not elsewhere classified, such as musical instruments and forest products, except lumber.
- Ammunition, except sporting-wholesale
- Cassettes, prerecorded: audio-wholesale
- Fire extinguishers-wholesale
- Firearms, except sporting-wholesale
- Game machines, coin-operated-wholesale
- Gas lighting fixtures-wholesale
- Logs, hewn ties, posts, and poles-wholesale
- Machine guns-wholesale
- Monuments and grave markers-wholesale
- Musical instruments-wholesale
- Phonograph records-wholesale
- Signs, except electric-wholesale
- Tapes, audio prerecorded-wholesale
- Timber products, rough-wholesale
- Wood chips-wholesale
Description for 5199: Nondurable Goods, Not Elsewhere Classified
Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 519: Miscellaneous Non-durable Goods
5199 Nondurable Goods, Not Elsewhere Classified: Establishments primarily engaged in the wholesale distribution of non-durable goods, not elsewhere classified, such as art goods, industrial yarns, textile bags, and bagging and burlap.
- Advertising specialties-wholesale
- Art goods-wholesale
- Bags, textile-wholesale
- Baskets: reed, rattan, willow, and wood-wholesale
- Broom, mop, and paint handles-wholesale
- Canvas products-wholesale
- Chamois leather-wholesale
- Christmas trees, including artificial-wholesale
- Clothes hampers-wholesale
- Cotton yarns-wholesale
- Fish, tropical-wholesale
- Foam rubber-wholesale
- Furs, dressed-wholesale
- Gifts and novelties-wholesale
- Glassware, novelty-wholesale
- Greases, animal and vegetable-wholesale
- Ice, manufactured or natural-wholesale
- Industrial yarn-wholesale
- Jewelry boxes-wholesale
- Leather and cut stock-wholesale
- Leather goods, except footwear, gloves, luggage, and
- Lighters, cigar and cigarette-wholesale
- Linseed oil-wholesale
- Novelties, paper-wholesale
- Oils, except cooking: animal and vegetable-wholesale
- Oilseed cake and meal-wholesale
- Pet supplies, except pet food-wholesale
- Pipes, smokers'-wholesale
- Plant food-wholesale
- Plastics foam-wholesale
- Rayon yarns-wholesale
- Rubber, crude-wholesale
- Sheet music-wholesale
- Silk yarns-wholesale
- Vegetable cake and meal-wholesale
- Wood carvings-wholesale
- Woolen and worsted yarns-wholesale
Importer And Exporter Insurance - The Bottom Line
To find out exactly what type of importer and exporter insurance coverage you need, speak with an experienced agent that specializes in commercial insurance.
Additional Resources For Manufacturing & Wholesaler 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
- Specialty Dealers And Distributors
The wholesale distribution industry plays a crucial role in the supply chain process, connecting manufacturers and retailers to customers. It involves the storage, transportation, and distribution of a wide range of products, including raw materials, finished goods, and equipment.
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.
As with any business, the wholesale distribution industry is exposed to a variety of risks that can impact its operations and profitability. These risks can range from property damage and theft to liability claims and employee injuries.
Business insurance helps to protect a wholesale distribution company from these potential losses by providing financial protection in the event of unexpected events. It helps to cover the costs of repairs, replacements, and legal fees, as well as lost income and wages.
For example, if a warehouse fire destroys a large portion of a wholesale distributor's inventory, business insurance can help to cover the cost of replacing the lost goods and repairing the damaged property. Similarly, if a customer is injured on the company's premises, liability insurance can help to cover the cost of legal fees and settlement payments.
In addition to protecting the company's assets and financial stability, commercial insurance also helps to protect the company's reputation. If a company is sued or faces a major loss, it can damage its reputation and credibility in the industry. Business insurance helps to mitigate these risks and maintain a positive reputation.
Overall, the wholesale distribution industry needs business commercial insurance to protect against unexpected risks and losses, maintain financial stability, and protect the company's reputation. Without it, a company may face significant financial losses and potential legal liabilities that could impact its operations and profitability.
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.