Beverage 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.
Beverage wholesalers receive packaged goods from foreign or domestic manufacturers or bottling plants for distribution to grocery stores, restaurants, concession stands, 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.
As a beverage distributor, you supply a variety of drinks (juice, water, soda, etc…) to various types of clients (restaurants, hotels, bars, etc).You offer an invaluable service to your clients; without you, they wouldn’t be able to provide their patrons with beverages.
While your business is important, and despite the fact that you go out of your way to make sure everything operates safely and properly, sometimes unforeseen circumstances arise. Accidents, fires, vandalism; these are just some of the things that can go wrong. As the proprietor of your company, you are responsible for any accidents, damages, and liability claims that may be made against you.
The costs that may be associated with any unforeseen circumstances that may arise can be exorbitant. If you have to cover these expenses yourself, you could end up facing serious financial turmoil. That’s where insurance comes in; instead of having to pay for these expenses out of your own pocket, your insurance carrier will assist with the expenses.
In other words, beverage wholesalers & distributors insurance can help you avoid significant financial losses. Furthermore, insurance is a legal requirement; if you aren’t properly insured, you could end up facing stiff penalties and hefty fines – you may even lose your business.
Why Is Insurance Important for Beverage Wholesalers & Distributors?
Like any business in any industry, there are several risks associated with owning and operating an beverage 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 beverage 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.
What Type Of Commercial Insurance Do You Need?
It’s important to find out what type of insurance coverage beverage distributors and wholesalers require in your local area; however, in most areas, examples of some of the forms of coverage businesses in this industry require include:
- Business Auto – If you use any trucks, vans, or other vehicles to make deliveries or conduct business, you’ll need commercial auto insurance.
- General Liability – This type of coverage protects you from third-party personal injury and property damage claims; if a vendor slips and falls on your property, this type of policy
- Commercial Property – To protect your warehouse from storm-related damage, fire, vandalism, and theft, you’ll need to carry commercial property insurance. This policy covers any damages that your warehouse may sustain, as well as any of the contents within it.
- Workers Compensation – You’ll also need to invest in workers’ comp insurance, which covers the cost of any injuries or illnesses that an employee may sustain while working, including necessary medical expenses and wages that he or she may lose while recovering.
These are just some of the types of beverage wholesalers & distributors 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: Accounts Receivable, Business Automobile Liability and Physical Damage, Business Income and Extra Expense, Business Personal Property, Computers, Contractors’ Equipment, Employee Benefits, Employee Dishonesty, General Liability, Goods in Transit, Hired and Non-Owned Auto, Umbrella, Valuable Papers and Records & Workers Compensation.
Other coverages to consider: Building, Computer Fraud, Cyber Liability, Earthquake, Employment-Related Practices, Equipment Breakdown, Flood, Forgery, Leasehold Interest, Money and Securities, Real Property Legal Liability, Signs & Stop Gap Liability.
Exposures And Risks Of Beverage Wholesalers & Distributors
Property exposure comes from multiple ignition sources, open construction, and the combustibility and damageability of the beverages and packaging materials. Ignition sources are from electrical wiring, equipment, and refrigeration units. All wiring must be well maintained and up to code for the occupancy. 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.
Beverages 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. Business income from dependent properties is a concern because most beverage distributors work with only one manufacturer.
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 as even a small power interruption could result in a large loss.
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. 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.
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 and bottlers. All products should be dated and stored as required by the manufacturer to allow easy access in case of recall.
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.
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.
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.
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.
Insurance Classification Beverage Wholesalers & Distributors
Commercial insurers classify beverage 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: 5149 Groceries and Related Products, Not Elsewhere Classified
- NAICS CODE: 424990 Other Grocery and Related Products Merchant Wholesalers, 424810 Beer and Ale Merchant Wholesalers
- Suggested ISO General Liability Code: 10141
- Suggested Workers Compensation Code: 8018
SIC Code 5149 – Groceries and Related Products, Not Elsewhere Classified
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of groceries and related products, not elsewhere classified. Establishments primarily engaged in the wholesale distribution of soft drinks, and in bottling and distributing natural spring and mineral waters, are classified in this industry, but establishments primarily engaged in bottling soft drinks are classified in Manufacturing, Major Group 20. This industry does not include establishments primarily engaged in the wholesale distribution of farm-product raw materials classified in Industry Group 515, nor those distributing beer, wine, and distilled alcoholic beverages of Industry Group 518.
- Bagging of tea
- Bakery products-wholesale
- Beverage concentrates-wholesale
- Bottling mineral or spring water-wholesale
- Breakfast cereals-wholesale
- Canned goods: fruits, vegetables, fish, seafoods, meats, and
- Canned specialties-wholesale
- Chocolate-wholesale
- Cleaning of dry foods and spices-wholesale
- Coffee: green, roasted, instant, freeze-dried, or extract-wholesale
- Cookies-wholesale
- Cooking oils-wholesale
- Crackers-wholesale
- Dairy products, dried or canned-wholesale
- Dog and cat food-wholesale
- Flavoring extract, except for fountain use-wholesale
- Flour-wholesale
- Fruit peel-wholesale
- Fruits, dried-wholesale
- Health foods-wholesale
- Honey-wholesale
- Hop extract-wholesale
- Macaroni-wholesale
- Malt extract-wholesale
- Malt-wholesale
- Margarine-wholesale
- Milk, canned or dried-wholesale
- Molasses, industrial-wholesale
- Pet food-wholesale
- Pickles, preserves, jellies, jams, and sauces-wholesale
- Pretzels-wholesale
- Rice, polished-wholesale
- Salad dressing-wholesale
- Salt, evaporated-wholesale
- Sandwiches-wholesale
- Sauces-wholesale
- Sausage casings-wholesale
- Shortening, vegetable-wholesale
- Soft drinks-wholesale
- Soups, except frozen-wholesale
- Spaghetti-wholesale
- Spices-wholesale
- Starches-wholesale
- Sugar, refined-wholesale
- Syrups, except for fountain use-wholesale
- Tea-wholesale
- Vegetable cooking oil-wholesale
- Wet corn milling products-wholesale
- Yeast-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all beverage 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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