Tires 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.
Tires Wholesalers & Distributors Insurance
Tire wholesalers receive tires and inner tubes from foreign or domestic manufacturers for distribution to auto dealers, auto parts stores, discount stores, and other retailers. The distribution center may be open 24 hours a day. Generally, the products are delivered to the customer on the distributor’s vehicles.
Cars, trucks, motorcycles, bicycles; no matter what type of tires you distribute or wholesale, it’s important that you set yourself up for success. Understanding the multitude of risks that you face and making sure that you are properly protected from those risks is one of the most vital things you can do to assure your success.
How can you protect yourself from the long list of liabilities that tire distributors and wholesalers face? – By making sure that you have the right type of tires wholesalers & distributors insurance coverage.
Why Is Insurance Important for Tires Wholesalers & Distributors?
Insurance provides financial security for business owners. Should anything go wrong and you are liable, if you didn’t have the right type of insurance, you could end up facing serious monetary trouble. If you’re business has the right type of tires wholesalers & distributors insurance insurance coverage, you wouldn’t have to worry about covering the expenses; instead, your insurer would cover them for you.
The financial protection that commercial insurance provides offers tire distributors and wholesalers peace of mind. It also assures their customers, vendors, employees, and anyone else they work with that should something go wrong and your company is responsible, they will be able to secure the funding they need to make the necessary repairs or receive the medical treatment they need.
What Type Of Commercial Insurance Do You Need?
The tires wholesalers & distributors insurance coverage needed depends on the unique circumstances and factors that affect their business. That said, however, there are specific forms of coverage that every business owner in this industry needs. Examples of key forms of coverage include:
- Product Liability – If it’s determined that any of the tires you distribute or sell are defective and have caused physical injuries or property damage, product liability insurance will take care of your legal expenses and any damages that a court may find you liable for.
- General Liability – If third-parties become injured on your property or claim that an employee damaged their property, general liability insurance would cover your legal defense fees, as well as any damages that you may be required to pay.
- Commercial Property – Your warehouse or store is damaged in a storm, by a fire, or by vandalism; so is some of your inventory, the equipment you use, and furnishings, too. Commercial property insurance will pay for any repair or replacement expenses.
- Workers’ Compensation – With workers’ comp, you’ll be able to supply your employees with the funding for the medical care they need. You’ll also be able to replace any wages that they might lose while they’re unable to work.
- Business Interruption – Should your business need to shut down while repairs are being made after it was damaged by a fire, a storm, or vandalism, business interruption insurance would replace the income you lost.
There are several other forms of tires wholesalers & distributors insurance coverage that should carried to ensure their business’ are fully protected.
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 Tires Wholesalers & Distributors
Property exposure comes from multiple ignition sources and open construction. Tires do not catch on fire easily; however, when they do, the fire is very difficult to put out and a heavy black smoke permeates and damages the entire area. Combustible items should be stored at a distance from the tires and tubing. 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 is a concern because tires are considered to be target items. 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. Physical audits 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.
Tires can be awkward to transport and require special tie-down procedures. The damage to the cargo will be minimal from a collision or overturn, but if a fire starts the entire load will be lost.
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.
If stock is stored outdoors, there should be adequate fencing and other security to prevent vandals from entering the premises. 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.
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 a central location.
Workers compensation exposure is very high. Back injuries, hernias, sprains, and strains can result from lifting so workers should be trained in proper lifting techniques and have conveyances available. 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.
Insurance Classification Tires Wholesalers & Distributors
Commercial insurers classify tires 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: 5014 Tires and Tubes
- NAICS CODE: 423130 Tire and Tube Merchant Wholesalers
- Suggested ISO General Liability Code: 10070
- Suggested Workers Compensation Code: 8046
SIC Code 5014 – Tires and Tubes
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of tires and tubes for passenger and commercial vehicles.
- Repair materials, tire and tube-wholesale
- Tires, used-wholesale
- Tires and tubes, new-wholesale
- Tires, used-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all tires 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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