Liquor Wholesalers Insurance Policy Information
Liquor Wholesalers Insurance. For liquor wholesalers, distributors and importers, there are a lot of things to consider when it comes to protecting your business. One of the things that you need to be concerned with is insurance.
Having the right insurance means that if something happens, it isn't going to completely derail your business and take it down.
Liquor wholesalers receive packaged beer, wine and/or distilled spirits from foreign or domestic distilleries for distribution to package liquor stores, grocery stores, restaurants and other retail establishments. The distribution center may be open 24 hours a day. Generally, the product is delivered to the customer on the distributor's vehicles.
Having the right liquor wholesalers insurance will ensure that your business continues long after an emergency or unexpected event, but many insurance companies do not offer specific insurance for liquor wholesales or distributors.
That's where customized plans comes in that cater specifically to liquor wholesale companies. Let's take a look at some of the things that may be included with this customized plan.
Liquor wholesalers insurance protects your beverage distribution business from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked liquor wholesalers insurance questions:
- What Is Liquor Wholesalers Insurance?
- How Much Does Liquor Wholesalers Insurance Cost?
- Why Do Wholesale Liquor Businesses Need Insurance?
- What Type Of Insurance Do Liquor Wholesalers Need?
- What Does Liquor Wholesalers Insurance Cover & Pay For?
What Is Liquor Wholesalers Insurance?
Liquor wholesalers insurance is a type of insurance designed specifically for businesses that distribute alcoholic beverages to retailers. This insurance covers various risks associated with the storage, transportation, and sale of liquor products.
Some of the common coverage included in liquor wholesalers insurance are general liability, property damage, product liability, liquor liability, cargo theft, and transportation insurance. This insurance helps protect the wholesaler from financial losses due to accidents, theft, or any other unexpected event that could result in damage to the business or its products.
How Much Does Liquor Wholesalers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small liquor wholesalers ranges from $77 to $109 per month based on location, size, payroll, sales and experience.
Why Do Wholesale Liquor Businesses Need Insurance?
Without insurance, you will have to pay any expenses that you are liable for out of your own pocket, including legal fees, property damages, and personal injuries; but, with the right liquor wholesalers insurance coverage, you can avoid the financial repercussions that are associated with the risks that your liquor distribution business faces.
What Type Of Insurance Do Liquor Wholesalers Need?
Regardless of the specifics of your beverage distribution business, there are certain types of insurance that all liquor wholesalers should have, including:
General Liability Insurance - As for making sure that you are covered on your premises and covered when it comes to general things that every employer has to worry about such as employer practices liability, you may want to go with general liability insurance.
General liability insurance is sort of blanket coverage that protects you from a number of common liability scenarios.
For example, some people think that property insurance slipcovers on employer when someone slips and falls, but is actually general liability. Property insurance is intended to protect the business owner in the case of a natural disaster or something else happening to the property.
General liability insurance is definitely necessary for any type of business, and a good insurance agent will be able to add and subtract elements in order to customize it to fit a liquor wholesale business perfectly.
Importers & Distributors Insurance - Some insurance companies are able to offer what is called importers and distributors insurance. This will go by different names depending on the insurance company and the specific program.
Importers and distributors insurance specifically protects companies that distribute products like wholesale liquor, other beverages and more.
In addition, it protects your company when you are importing products from other parts of the world including making sure that they arrive on time and undamaged as well as protection against various other mishaps that can occur while the cargo is on route or after it arrives in your country.
Business Auto - If you are a distributor, then you are likely going to need commercial automobile insurance for your fleet.
Commercial automobile insurance extends far beyond normal liability insurance that most are familiar with and protects your vehicle and make sure that you are covered in the case of a collision with someone else who then decides later on that that are going to sue.
It protects against various types of damage no matter who was at fault including underinsured or uninsured motorists. Generally, this type of liquor wholesalers insurance is referred to as full coverage insurance or comprehensive insurance, and you will need it for every vehicle you operate as part of doing business.
Workers Compensation - Companies with employees will need to have Worker's Comp as well. If you're liquor wholesale business is really small, then you may be able to run it with a couple of people. However, once you start hiring salary or hourly workers, then you're going to be required to carry Worker's Compensation.
Worker's Compensation protects employees if they get injured on the job. However, it also protects employers because employees are barred from taking any legal action because they are already receiving compensation from the insurance payout. In some cases, this covers more than just medical bills such as lost wages.
Above are just a few examples of the liquor wholesalers insurance coverage that should be purchased. Your insurance agent may be able to do a great deal of customization to help you run your business successfully.
For example, your agent may be able to expand or limit the protection offered so that it only applies to your particular distribution route. In addition, lines of insurance may be available in the case of equipment breakdown, selling price loss valuation, wine and spirit inventory loss, business property damage, product withdrawal expense, liquor liability, cyber risk and more.
In addition, your insurance company may have resources available to them that could be useful such as location surveys to evaluate fire and security systems in your building, inspections of building and equipment, accident investigations, protection against identity theft, emergency planning and evacuation and a whole lot more.
Liquor Wholsaler's Risks & Exposures
Premises liability exposure is generally limited due to lack of public access to the storage facilities. If customers pick up goods, loading docks must be clearly marked and user-friendly. Customers should be confined to specific areas that are kept clean, dry and free of obstacles. Contracts with transportation and storage providers may expose the operation to additional liability. Railroad sidetrack agreements pose additional concerns.
If there is a railroad sidetrack or dock, an employee must 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.
Products liability exposure is low if products are all from domestic manufacturers. All products should be dated and stored as required by the manufacturer to allow easy access in case of recall. There should be controls in place to prevent contamination from chemicals used inside the facility, such as insecticides and pesticides. Stock should be regularly rotated so older, but not out of date, stock is sold first, and out of date stock is removed and discarded.
Environmental impairment exposure can be high due to ammonia and other refrigerants and fuel tanks used to service vehicles. All underground tanks and pipes should be routinely tested for leakage. Spill procedures must be in place to prevent the accidental discharge of contaminants. Contracts should be in place to dispose of all environmentally dangerous chemicals. Record keeping is critical.
Liquor liability exposure is low if tours are not permitted and samples are not given out. All serving of alcohol must comply with state and federal regulations. Employees must be trained to recognize signs of intoxication.
Workers compensation exposure is very high. Back and lifting injuries, hernias, sprains, and strains can result from lifting so workers should be trained in proper lifting techniques and have conveyances available. Forklift and cherry picker 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 to all workers in the event of any ammonia leak. Floor coverings or coatings may be slick and accumulate condensation, posing slip and fall hazards. Housekeeping is critical.
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.
Property exposure comes from multiple ignition sources, open construction, and the high combustibility and damageability of liquor and packing materials. Ignition sources are from electrical wiring, equipment, and refrigeration units. The age, condition and maintenance of coolers and refrigeration equipment are important to review.
Ammonia leaks could cause an explosion. There should be detection systems, emergency shut-off valves, and exhaust systems to allow venting in the case of a leak. 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.
Alarms should be in place to warn of power outage or shutdown. Backup generators should be available in case of equipment failure. Good housekeeping and fire controls are critical. Smoking should be prohibited. Even a small loss can cause all stock to be condemned by the FDA due to possible heat, smoke or water contamination. If there is a sprinkler system, heads must be located high enough to avoid accidental contact with forklifts. Recharging of forklifts and maintenance of vehicles should be done in a separate, ventilated area away from combustibles.
Liquor 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 significant as temperatures must remain constant for refrigeration equipment. All equipment must be inspected and maintained on a regular basis. Back-up generators should be available. Additional coverage for spoilage and ammonia contamination should be considered because even a small power interruption could result in a large loss.
Crime exposure is from employee dishonesty as liquor has a high street value. This operation involves a number of transactions and accounts that can be manipulated if duties are not separated. Background checks, including criminal history, should be performed on all employees handling money. Regular audits, both internal and external, are important in order to prevent employee theft of accounts. Physical inventories should be conducted at least annually.
Inland marine exposure is from accounts receivable if the distributor offers credit to customers, computers for tracking inventory, contractors' equipment, goods in transit, and valuable papers and records for manufacturers' and customers' records. Duplicates must be kept of all data to permit easy replication in the event of a loss. Contractors' equipment includes forklifts, cherry pickers, and hand trucks used for moving stored items.
While goods may come to the warehouse via common carriers or trains, goods are generally delivered to retailers on trucks owned by the distributor. Goods in transit are subject to breakage losses from collision or overturn. Due to the potential for theft, vehicles should be unmarked, have alarms, and be attended at all times.
Commercial auto exposure comes from the salespersons' fleet and delivery vehicles. There should be written policies on personal and permissive use of any vehicles provided to employees. 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 conducted. Vehicles must be well maintained, including refrigeration systems, with records kept in central locations.
What Does Liquor Wholesalers Insurance Cover & Pay For?
Liquor wholesalers and distributors can face various legal issues, leading to lawsuits. Here are four common reasons they might be sued, along with how insurance can help cover the costs associated with these legal battles:
Liquor Liability: If a customer consumes alcohol sold by a distributor or wholesaler and then causes injury or property damage, the distributor or wholesaler could be held liable. Liquor liability insurance can help cover the costs associated with such lawsuits, including legal fees, settlements, and judgments. For example, if an intoxicated customer causes a car accident, the injured party may sue the distributor for providing the alcohol. Liquor liability insurance can help cover the costs of defending the case and any resulting settlement or judgment.
Product Liability: Distributors and wholesalers can be sued if a customer suffers injury or illness due to a defect in the alcohol product itself. Product liability insurance can help cover the costs of legal defense, settlements, and judgments. For instance, if a batch of contaminated alcohol leads to a customer's illness, the affected customer may file a lawsuit against the distributor. Product liability insurance can help pay for the distributor's legal defense and any compensation awarded to the plaintiff.
Employment Practices Liability: Employees might sue liquor wholesalers and distributors over issues such as wrongful termination, discrimination, or harassment. Employment practices liability insurance (EPLI) can help cover the costs of defending against these lawsuits and any resulting settlements or judgments. For example, if an employee sues for wrongful termination after being fired, EPLI can help pay for the legal defense and any settlement or judgment awarded to the employee.
General Liability: General liability insurance covers a range of incidents that could lead to lawsuits, including property damage, bodily injury, and personal or advertising injury. For example, if a customer slips and falls in a distributor's warehouse, they may sue for their injuries. General liability insurance can help cover the costs of legal defense, settlements, and judgments resulting from such incidents.
In all these cases, having the appropriate insurance coverage can help protect liquor wholesalers and distributors from the financial burden of lawsuits, allowing them to focus on their business operations.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5181 Beer and Ale, 5182 Wine and distilled Alcoholic Beverages
- NAICS CODE: 424810 Beer and Ale Merchant Wholesalers, 424820 Wine and Distilled Alcoholic Beverage Merchant Wholesalers
- Suggested Workers Compensation Code(s): 7390 Ale or Beer Dealer - Wholesale & Drivers, 8018 Store - Wholesale - NOC
5181: Beer and Ale
Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 518: Beer, Wine, And Distilled Alcoholic Beverages
5181 Beer and Ale: Establishments primarily engaged in the wholesale distribution of beer, ale, porter, and other fermented malt beverages.
- Beer and other fermented malt liquors-wholesale Porter-wholesale
5182: Wine and distilled Alcoholic Beverages
Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 518: Beer, Wine, And Distilled Alcoholic Beverages
5182 Wine and distilled Alcoholic Beverages: Establishments primarily engaged in the wholesale distribution of distilled spirits, including neutral spirits and ethyl alcohol used in blended wines and distilled liquors.
- Bottling wines and liquors-wholesale
- Brandy and brandy spirits-wholesale
- Cocktails, alcoholic: premixed-wholesale
- Liquors, distilled-wholesale
- Neutral spirits-wholesale
- Wine coolers, alcoholic-wholesale
Liquor Wholesalers Insurance - The Bottom Line
To ensure your beverage distribution business is properly protected, speak with an knowledgeable agent that specializes in liquor wholesalers insurance.
Additional Resources For Wholesale And Distribution 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.