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Wholesaler Distributor Insurance

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Tools Wholesaler Distributor Insurance Policy Information

Tools Wholesaler Distributor Insurance

Tools Wholesaler Distributor Insurance. Hand tools, power tools, or a combination of both; if you are a tool distributor or wholesaler, no matter what type of products you handle, you are exposed to a variety of risks.

As the owner and operator of your tool distribution center or wholesale supply store, you are liable for anything that goes wrong. If an employee is injured on the job, you are responsible for any medical care he or she requires; plus, you will have to replace any wages the employee may lose while recovering from those injuries.

Or, if you a consumer files a product liability lawsuit because a tool you sold was defective and caused a physical injury or damaged property, you would be liable for any legal expenses and damages that a court may determine you are responsible for.

These are just some of the examples of the things that could go wrong. The cost of liabilities can be exorbitant; in fact, they can be so extensive that they could put you could end up facing serious financial trouble.

To offset the costs that you may be responsible for, it's important that you invest in the right type of tools wholesaler distributor insurance coverage.

Tools wholesaler distributor insurance protects your business from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked tools wholesaler & distributor insurance questions:


How Much Does Tools Wholesaler Distributor Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small tools wholesaler distributor businesses ranges from $47 to $79 per month based on location, size, revenue, claims history and more.


Why Do Tools Wholesalers And Distributors Need Insurance?

Wholesaler Distributor Insurance

Given the vast array of risks that tool distributors are exposed to, being properly insured is the best way to avoid crippling financial losses. If you ever hit a bump in the road - if a third-party sues you, your commercial property is damaged, your inventory is stolen, etc... - if you have the right type of insurance coverage, you wouldn't have to pay these expenses yourself; instead, the company that issues your policies would foot the bill for you.

In other words, tools wholesaler and distributor insurance provides you with the financial protection you need from the long list of risks you face. Additionally, some types of tool distributors insurance coverage are mandated, meaning that you are legally required to carry them.

Furthermore, being properly insured can help to boost the success of your business, as it lets your clients, vendors, employees, and anyone else you work with know that they will have access to the funding they need if anything that you are responsible for goes wrong.


What Type Of Insurance Do Tools Wholesalers And Distributors Need?

Because of the extensive risks that businesses in this industry are exposed to, there are multiple types of tools wholesaler and distributor insurance coverage that company should have. Examples of some of the essential policies you should invest in include:

  • Business income
  • Commercial auto
  • Commercial crime
  • Commercial general liability
  • Commercial property
  • Product liability
  • Umbrella/excess liability
  • Workers' compensation


These are just some of the types of tools wholesaler distributor insurance coverage you should carry. You can carry individual policies, or opt for a commercial package policy that combines several different types of coverage under a single policy.

Tools Wholesale Distributor's Risks & Exposures

Wholesale Distribution Insurance

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. Products should be marked for easy access in case of recall.

Workers compensation exposure is very high. Lifting injuries such as back pain, hernias, sprains and strains are common so workers should be trained in proper lifting techniques and to use conveyances. Forklift and cherry picker operators must be properly trained.

Shelving must be stable to prevent stored goods from falling onto workers. Floor coverings or coatings in the warehouse can pose slip and fall hazards. Housekeeping is critical. Salespersons and delivery drivers may be subject to holdup. Training must be provided to deal with such situations.

Property exposure come from multiple ignition sources, open construction, and the combustibility of packaging materials. Ignition sources include electrical wiring and equipment. All wiring must be well maintained and up to code for the occupancy.

Most tools are metal based with low ignition potential, damageability and combustibility. Power tools may include electrical components with more potential for damage from water used to put out a fire or from a sprinkler system.

Good housekeeping and fire controls are critical. All stock should be racked and stored with adequate aisle space and limited stockpiling to prevent the spread of a fire. Smoking should be prohibited. 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. Theft of power equipment can be a concern. Alarms, guards, fencing and other security precautions must be in place as appropriate to the location.

Crime exposure is from employee dishonesty. 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.

Receipts must be provided for all payments and compared to money received. Electrical power equipment is attractive to thieves because of its high street value. Good security systems should be in place to prevent employee theft. 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 contract or common carriers or trains, items are generally delivered to customers on trucks owned by the distributor. Goods can be damaged during transit by collision or overturn.

Commercial auto exposure comes from the salespersons' fleet and delivery vehicles. There should be a written policy 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 with records kept in central locations.

Commercial Insurance And Business Industry Classification

  • SIC CODE: 5072 Hardware
  • NAICS CODE: 423710 Hardware Merchant Wholesalers
  • Suggested ISO General Liability Code(s): 13715
  • Suggested Workers Compensation Code(s): 8010

Description for 5072: Hardware

Division F: Wholesale Trade | Major Group 50: Wholesale Trade-durable Goods | Industry Group 507: Hardware, And Plumbing And Heating Equipment

5072 Hardware: Establishments primarily engaged in the wholesale distribution of cutlery and general hardware, including handsaws; saw blades; brads, staples, and tacks; and bolts, nuts, rivets, and screws. Establishments primarily engaged in the wholesale distribution of nails, non-insulated wire, and screening are classified in Industry 5051.

  • Bolts, nuts, rivets, and screws-wholesale
  • Brads-wholesale
  • Builders' hardware-wholesale
  • Cutlery-wholesale
  • Fasteners, hardware-wholesale
  • Handsaws-wholesale
  • Handtools, except automotive and machinists' precision-wholesale
  • Hardware, heavy-wholesale
  • Hardware, shelf or light-wholesale
  • Locks and related materials-wholesale
  • Power handtools-wholesale
  • Saw blades-wholesale
  • Staples-wholesale
  • Tacks-wholesale
  • Washers, hardware-wholesale

Tools Wholesaler Distributor Insurance - The Bottom Line

Not all tools wholesaler distributor insurance polices are designed equal. If you are shopping for business insurance, or want to see if you have the right coverage, speak to an experienced agent to take a look at your operation.

In many cases they can save you premium dollars and offer you better policy options than you currently have.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

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.


Distribution Wholesaler Insurance

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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