Business owner’s policy for wholesalers and distributors

Wholesalers buy in bulk to keep costs low – the same principle behind a business owner’s policy. A BOP bundles general liability insurance and commercial property insurance, usually at a lower rate than purchasing the policies separately. A wholesaler typically has a warehouse and a large amount of inventory, which makes both policies a worthwhile investment. A BOP protects against:

• Damage to inventory, equipment, and other business property
• Customer injuries and property damage
• Copyright infringement and other advertising injuries
• Temporary forced closure

Wholesaler business owners can customize a BOP to meet their specific needs. Useful add-ons include business interruption insurance, which could cover your operating costs if a fire at your warehouse or other disaster forces your business to temporarily close.

Businesses that are eligible for a BOP typically:

• Have fewer than 100 employees
• Have a small office or warehouse
• Make less than $1 million in annual revenue
• Operate in a low-risk industry
• Need less than 12 months of business interruption insurance

Talk to a licensed Insureon agent to find out if a BOP fits your wholesale company.

Commercial property insurance protects your property from damaging events like fire, burst pipes, theft, and vandalism. If your wholesale business does not qualify for a BOP, it’s worth purchasing commercial property insurance as a standalone policy if your livelihood depends on your inventory.

The commercial property insurance included in a BOP protects:

• Warehouse inventory and equipment
• Office furniture and fixtures
• Your building if you own it

The general liability portion of a business owner’s policy can pay for expenses related to bodily injuries or property damage, including legal bills from a lawsuit. It typically includes product liability insurance, which covers harm caused by products that you sold.

For instance, it can offer coverage if:

• A client trips over merchandise at your warehouse and breaks a leg
• An electronic device that you sold causes a fire at someone's home
• A child is injured playing with a toy sold by your business

Product liability insurance is crucial for any business that makes, sells, or distributes products. That's because your company could be held responsible for harm caused by a product even if you didn't manufacture or design it.

The general liability portion of a BOP also offers coverage against advertising injuries, including:

• Written defamation (libel) and spoken defamation (slander)
• Copyright infringement

For example, if a wholesale company’s office clerk posts a negative review about a rival wholesaler and your business is sued for libel, general liability insurance could pay for the resulting legal expenses.

If your business is forced to temporarily close, it could result in lasting financial damage. Business interruption insurance shields your wholesale business from lost revenue and other expenses related to closure caused by a covered loss.

For example, your wholesale business may need to close for a few weeks after a windstorm topples a tree onto your warehouse. Business interruption insurance would cover lost profits and normal operating expenses, allowing you to pay your employees and survive a disruptive event.

A business owner’s policy provides general liability and property protection for wholesalers, but it doesn’t protect against employee injuries and other risks. Wholesale distributors should also consider:

Workers’ compensation insurance: Workers' comp is required in almost every state for wholesale businesses that have employees. It covers medical costs for work-related injuries and illnesses.

Commercial umbrella insurance: Similar to excess liability insurance, this policy boosts coverage on a general liability, employer’s liability, or commercial auto insurance policy once the coverage limit is reached.

Commercial auto insurance: This policy covers vehicles owned by your business. It typically pays for accidents and damages related to theft, weather, and vandalism.

Cyber liability insurance: Cyber insurance helps your business recover financially from data breaches and cyberattacks.

Surety bonds: This bond assures a wholesaler’s clients that an insurance company will reimburse their losses if the business fails to fulfill the terms of a contract.

Are you ready to safeguard your wholesale business with a business owner’s policy? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.