Cabinets 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.
Cabinets Wholesalers & Distributors Insurance
Cabinet wholesalers receive items such as kitchen or bathroom cabinets, shelves, and counters as well as adhesives, nails, and sealants from foreign or domestic manufacturers for distribution to retailers, commercial builders and other commercial establishments. The distribution center may be open 24 hours a day. Generally, the products are delivered to the customer on the distributor's vehicles.
Cabinets are an essential part of kitchens, bathrooms, workshops, doctors' offices, and just about any other space that requires storage. Since cabinets are always in high demand, owning and operating a wholesale and distribution center that provides this type of furniture can be quite lucrative.
While you do your absolute best to ensure that you are offering the best service and that everything goes as smoothly as possible, sometimes, things can happen that are beyond your control. When they do, it's important that you are properly protected with the right type of cabinets wholesalers & distributors insurance coverage.
Why Is Insurance Important for Cabinets Wholesalers & Distributors?
Just like any business, cabinet distributors and wholesalers face a number of risks. Clients can sue you for property damage or personal injuries. Workers can sustain injuries while they're on-the-job. Your warehouse could be damaged in a major storm. An accident in one of your delivery trucks could occur. These are just some of the incidents that could arise. As the proprietor of your business, you are responsible for covering the cost of any damages that may occur should an unforeseen event arise.
The cost of damages - as well as any legal fees - can be astronomical. If you had to pay these expenses out of your own pocket, you could end up facing serious financial hardship. That's why you need to invest in cabinets wholesalers & distributors insurance. Should an incident occur that you are liable for, your insurance carrier will cover the cost of the expenses.
Commercial insurance, in essence, prevents you from financial devastation. Additionally, certainly types of insurance coverage are legally required; if you don't have mandated coverage, you could face stiff penalties and fines; you could even lose your business.
What Type Of Commercial Insurance Do You Need?
The specific forms of insurance coverage you'll need to invest in depend on a variety of factors, including the location of your business and the size of your operation; however, in general, most cabinet wholesalers should have the following coverage:
- Commercial General Liability - If a vendor, client, or any other third-part sustains an injury on your property or claims you or an employee caused property damage, this type of coverage will assist with any damages that you may be required to pay, as well as any related legal expenses if the party files a lawsuit against you.
- Product Liability - If any of the products you sell are defective and cause damages or injuries, product liability insurance will help to cover the cost.
- Commercial Property - This type of insurance protects the physical structure of your warehouse, as well as the contents that it contains, from acts of nature, vandalism, and theft. If a fire occurs, for example, your insurance carrier will help to cover the cost of the repairs and any damaged inventory.
These are just some of the types of cabinets 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 Cabinets Wholesalers & Distributors
Property exposures are high due to multiple ignition sources, open construction, and the combustibility and damageability of wooden cabinetry, adhesives, sealants and their packaging materials. Ignition sources include electrical wiring and equipment. All wiring must be well maintained and up to code for the occupancy.
Containers of adhesives and flammables should be stored away from combustibles. 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 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 can be a concern. 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. 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. Goods in transit are subject to loss by 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 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. For products received from foreign manufacturers, the exposure will be that of a manufacturer. 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. 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.
Insurance Classification Cabinets Wholesalers & Distributors
Commercial insurers classify cabinets 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: 5021 Furniture, 5046 Commercial Equipment NEC, 5099 Durable Goods, NEC
- NAICS CODE: 423210 Furniture Merchant Wholesalers, 423440 Other Commercial Equipment Merchant Wholesalers, 423310 Lumber, Plywood, Millwork and Wood Panel Merchant Wholesalers
- Suggested ISO General Liability Code: 12467, 13351
- Suggested Workers Compensation Code: 8044, 8235
SIC Code 5021 - Furniture
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of furniture, including bedsprings, mattresses, and other household furniture; office furniture; and furniture for public parks and buildings. Establishments primarily engaged in the wholesale distribution of partitions, shelving, lockers, and store fixtures are classified in Industry 5046.
- Bar furniture-wholesale
- Cafeteria furniture-wholesale
- Chairs household, office, and public building-wholesale
- Church pews-wholesale
- Desks, including school-wholesale
- Furniture, juvenile-wholesale
- Furniture, unfinished-wholesale
- Furniture household, office, restaurant, and public building-wholesale
- Lawn furniture-wholesale
- School desks-wholesale
- Theater seats-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all cabinets 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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