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Wholesalers Are Vulnerable to Severe Weather Events

of businesses experienced an interruption in operations because of severe weather

Another 52 percent reported interruptions from power outages, according to a 2013-2014 Continuity Insights and KPMG LLP study. Maybe your wholesaler client wasn’t one of them, but was their supplier? Wholesalers depend on their supply chain, and if a supplier's operations are interrupted, your client's business is on hold, too. Make sure your clients have all their bases covered by finding them Commercial Property Insurance with Business Interruption Insurance.

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Important Insurance Polices for Wholesale Businesses

Wholesalers manage the sale and distribution of large quantities of merchandise that they ship, store, sort, repackage, or assemble. Each activity exposes your distributor clients to unique risks. Understanding the risks of the wholesale industry is the first step to ensuring you connect your clients with the policies that adequately address their exposures.

As you are already aware, no policy covers everything. Your wholesale clients will need different coverages to protect their business from potential losses. Here are some policies that address the risks wholesalers face:

General Liability Insurance

If your client's associate visits their distribution center and suffers an injury, your client can lose time and money in the subsequent lawsuit over medical expenses. General Liability Insurance covers the cost of investigating and defending against third-party claims of bodily injury and property damage. It can pay for court costs, legal defense fees, and judgments or settlements.

Property Insurance

Chances are your wholesale client has a warehouse or distribution center that is full of inventory, equipment, and supplies that are crucial to their business. Property Insurance protects these business assets, paying to repair or replace them if they are damaged in a covered incident. Typically, covered events include fire, theft, wind damage, and vandalism.

Workers' Compensation Insurance

Some degree of Workers' Compensation Insurance is mandatory in almost every state. This coverage protects your wholesale client in the event their employee suffers an occupational illness or injury. Say an employee can't work because of a back injury related to lifting heavy boxes. Workers' Compensation covers the employee's medical bills and lost wages. Most Workers' Comp plans also have liability coverage for legal expenses if your client is sued over the work accident.

Commercial Auto / Hired & Non-Owned Auto Insurance

Wholesalers and distributors likely use a fleet of vehicles on a regular basis, making Commercial Auto / Hired & Non-Owned Auto Insurance an important coverage for your client. Commercial Auto covers the vehicles your client has registered in their name or the name of their business. HNOA offers their business liability protection when it's sued over accidents in leased, rented, or borrowed vehicles.

Umbrella Liability / Excess Liability Insurance

Umbrella Insurance, also called Excess Liability coverage, is a smart way for your wholesale client to boost their protection. Your client can make a claim on their Umbrella policy when a lawsuit exceeds certain other policy limits. Namely, Umbrella coverage can be applied to their General Liability, Hired and Non-Owned Auto, and Employer's Liability Insurance (part of most Workers' Comp plans). For instance, if your client has $1,000,000 of General Liability coverage but is found liable for $1,500,000 worth of damages, their Umbrella policy can cover the difference. Umbrella Insurance is usually more cost effective than raising individual policy's limits.

Tips for Insuring Wholesale Businesses

To become an ally in your client's business protection planning, look for ways they can save money on their insurance premiums. Here are some ways to ensure you don't overlook cost-cutting options:

Investigate a Business Owner's Policy (BOP)

If your client's business is considered low risk and only has a few employees, they may qualify for a Business Owner's Policy. A BOP bundles General Liability and Property Insurance together at a reduced annual premium.

Suggest your clients exclude themselves from Workers' Comp coverage

Most states allow sole proprietors to opt out of their own Workers' Comp Insurance. This option can reduce your client's premium. However, if their daily work puts them in harm's way, they may be better served including themselves on the policy.

Know the difference between Commercial and Personal Auto coverages

If your client uses their insured personal vehicle for work, they should still supplement their coverage with Commercial Auto Insurance. Most Personal Auto policies exclude coverage for business-related accidents.

Small-business owners always have an eye on the bottom line, but remind your client a deal is only good if it protects their assets. Be sure to compare rates and coverage from multiple carriers to find suitable insurance.

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