Air conditioning and heating wholesalers & distributors insurance helps protect your business against third-party injuries, faulty products, damaged or stolen inventory, injured employees and other specialized risks. Get information on costs, coverage options and more.
Air-conditioning and/or heating wholesalers receive their products from foreign or domestic manufacturers for distribution to retailers, commercial builders and other commercial establishments. The wholesaler may sell stock from a warehouse or may simply arrange for items to be shipped directly from the manufacturer to the purchaser. The wholesaler does not modify the equipment in any way nor does installation work. The distribution center may be open 24 hours a day. Generally, the products are delivered to the customer on the distributor’s vehicles.
Are you thinking about starting an air conditioning and heating wholesale company or do you already run one? If so, it’s essential that you take the proper precautions to protect yourself and your business. Business owners in this industry face several liabilities, and the best way to safeguard yourself from these risks is by investing in the right type of air conditioning and heating wholesalers & distributors insurance coverage.
Why Is Insurance Important for Air Conditioning And Heating Wholesalers & Distributors?
Like any business in any industry, there are several risks associated with owning and operating an air conditioning and heating wholesale distribution center. Your property and the inventory within it could be damaged by a fire or a flood. A vendor could be injured while making a delivery on your property. A client could file a lawsuit against you, claiming that you sold them a defective product that damaged their property. An employee could sustain a work-related injury.
These are just some of the scenarios that could occur, and as the owner and operator of your company, you would be held liable for the damages; damages that could cost an exorbitant amount of money. If any lawsuits are filed against your company, you would also be responsible for the legal fees. These expenses could be financially crippling and could ultimately lead to the loss of your livelihood – and even your personal property.
With the right type of air conditioning and heating wholesalers & distributors insurance coverage, you would be protected from potential financial losses. Should a client file a lawsuit against you, your insurance company would help to cover the cost of legal defense fees and settlements. If your property is damaged in a fire, your carrier would assist with the cost of repairing and replacing the damages.
If an employee sustained an injury while working, your insurance would cover the cost of his or her medical care, as well as any wages that he or she may lose while recovering. In other words, insurance can help you avoid serious financial losses.
What Type Of Commercial Insurance Do You Need?
There are several types of air conditioning and heating wholesalers & distributors insurance coverage that companies in this industry should have. Some of the basic business insurance policies include:
- Commercial General Liability: This protects you against third-party claims. If vendor sustained an injury on your property or a client filed a lawsuit, this type of coverage would help to cover the legal defense fees, as well as any damages that you may be held responsible for.
- Commercial Property: This type of coverage protects your commercial property and the contents within it from damages associated with acts of nature and vandalism.
- Workers’ Compensation: If an employee sustains a work-related illness or injury, workers’ comp insurance would help to pay for his or her medical care and lost wages.
These are just some of the types of insurance coverage you should carry. You can carry individual policies, or opt for a comprehensive policy that combines several different types of coverage under a single policy.
Minimum recommended coverages: Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Accounts Receivable, Computers, Contractors’ Equipment, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto and Workers Compensation.
Other coverages to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Money and Securities, Signs, Cyberliability, Employment-Related Practices and Stop Gap Liability.
Exposures And Risks Of Air Conditioning And Heating Wholesalers & Distributors
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 exposures are 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 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 exposures 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. While the stock will be primarily metal with some electrical parts, the electrical components are susceptible to damage from sprinkler leakage or from water used to put out a fire.
All stock should be racked and stored with adequate aisle space and limited stockpiling to prevent a fire from spreading. 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.
The high street value of copper components can result in stock becoming target items for thieves. Alarms, guards, fencing and other security precautions must be in place as appropriate to the location(s).
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. Heating and air conditioning equipment is attractive to thieves because of their high street value. Good security systems should be in place to discourage 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. 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 with records kept in a central location.
Insurance Classification Air Conditioning And Heating Wholesalers & Distributors
Commercial insurers classify air conditioning and heating wholesaler and distribution businesses using several coding systems. You can wind up paying a lot more for your insurance premiums if your distribution business is not properly classified:
- SIC CODE: 5075: Warm Air Heating and Air-Conditioning Equipment and Supplies
- NAICS CODE: 423730 Warm Air Heating and Air Conditioning Equipment and Supplies Merchant Wholesalers
- Suggested ISO General Liability Code: 10010, 13930
- Suggested Workers Compensation Code: 8010
SIC Code 5075 – Warm Air Heating and Air-Conditioning Equipment and Supplies
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of warm air heating and air-conditioning equipment and supplies. Construction contractors primarily engaged in installing warm air heating and air-conditioning equipment are classified in Construction, Industry 1711.
- Air pollution control equipment and supplies-wholesale
- Air-conditioning equipment, except room units-wholesale
- Automotive air-conditioners-wholesale
- Compressors, air-conditioning-wholesale
- Condensing units, air-conditioning-wholesale
- Dust collection equipment-wholesale
- Furnaces, heating: electric-wholesale
- Furnaces, warm air-wholesale
- Humidifiers and dehumidifiers, except portable-wholesale
- Ventilating equipment and supplies-wholesale
- Warm air heating and cooling equipment-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all air conditioning and heating wholesalers & distributors insurance polices are the same. If you are shopping for new insurance, or just want to see if you have the best fit policy, let one of our expert agents take a look at your situation. In most cases we can save you money and offer you better policy options than you currently may have.
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