Shoes 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.
Shoes Wholesalers & Distributors Insurance
Shoe wholesalers receive children's, men's and women's footwear from foreign or domestic manufacturers for distribution to shoe stores, clothing stores, department and discount stores, and other retail establishments. Most shoe distributors stock includes related goods such as hosiery, purses, shoelaces, shoe polishes and dyes. The distribution center may be open 24 hours a day. Generally, the products are delivered to the customer on the distributor's vehicles.
Shoe distributors and wholesalers have a lot of responsibilities. From fulfilling and shipping orders to making sure your stock is replenished, from managing invoices to maintaining the equipment you rely on to operate your business, and from making sure that your employees have a safe environment to work in to keeping your warehouse or store protected; you definitely have a lot on your plate.
As the owner and operator of your shoe distribution center or wholesale supply store, you're also liable for anything that may go wrong. That includes things like physical injuries, damaged property, equipment repairs, replacement of stolen or damaged inventory, and so much more. The expenses that are associated with the risks that you are exposed to can be excessive; in fact, they could be financially crippling and you could even end up losing your business completely.
If you're properly insured, when trouble strikes, you won't have to worry about the financial implications. Why? - Because the insurance company that offers policies that cover certain risks will pay for any associated costs. Depending on the coverage you have and the risks that are covered, shoes wholesalers & distributors insurance can cover the cost of things like property and equipment repairs, medical bills, legal fees, loss of income - and much more.
Why Is Insurance Important for Shoes Wholesalers & Distributors?
Like any business in any industry, there are several risks associated with owning and operating an shoes 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 shoes 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?
There are several types of shoes wholesalers & distributors insurance insurance coverage that should be considered. Some of the basics include:
- Commercial crime - If inventory, sensitive data, or even money are stolen from your business by a third-party or even an employee, commercial crime insurance will protect you. This coverage will reimburse you the amount that the stolen goods were valued.
- Commercial property - With commercial property insurance, your warehouse, store, or any other commercial space you use - whether owned or leased - will be covered from perils like fire, storm damage, and acts of vandalism. This coverage will repair any damages to the physical structure of your building, as well as anything that may be damaged within the space.
- Workers' compensation - When your employees are in need of medical care because of injuries or illnesses they sustain while on the job, you will be liable for their medical bills. Workers comp insurance not only pays for the medical expenses, but also replaces a portion of the wages that your employees might lose when they are injured or ill and unable to work.
- Business income - If your distribution center or wholesale supply store ever needs to be closed for business while recovering from a peril, you could lose a lot of money. Business income insurance will replace the income you lose while you're unable to operate.
- Flood - While commercial property insurance does protect against certain perils, like fire and acts of nature, it usually doesn't cover flood damage. For that, you'll need a separate policy. If your business is located in an area that is prone to flooding, investing in this type of insurance is a wise idea.
These are just some of the types of shoes 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 Shoes Wholesalers & Distributors
Property exposure comes from multiple ignition sources, open construction, and the combustibility of footwear and related items. Ignition sources include electrical wiring and equipment. All wiring must be well maintained and up to code for the occupancy. High-end women's shoes are susceptible to damage with the least salvage potential due to its seasonality.
Shoe polish is flammable and may add to the fire load. Good housekeeping and fire controls are critical. All stock should be racked and stored on shelves. There should be 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. Because certain items, such as "name" brands or leather footwear are very attractive in the market place, adequate theft control must be in place. There should be alarms, guards, lighting, fencing, and other security precautions 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. High-end and "name" brand shoes and purses are attractive 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 and hand trucks used for moving stored items.
While goods may come to the warehouse via contract or common carriers or trains, goods are generally delivered to retailers on trucks owned by the distributor. Goods in transit are subject to loss 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 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.
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.
Workers compensation exposure is very high. Back injuries, hernias, sprains, and strains can result from lifting. Workers should be trained in proper lifting techniques and have conveyances available. Forklift and cherry lifter operators must be properly trained. Shelving must be stable to prevent stored goods from falling onto workers. Floor coverings or coatings in the warehouse may pose slip and fall hazards. Housekeeping is critical. Workers may suffer from allergic reactions, skin or respiratory ailments due to preservatives used in manufacturing leather footwear.
Insurance Classification Shoes Wholesalers & Distributors
Commercial insurers classify shoes 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: 5139 Footwear
- NAICS CODE: 424340 Footwear Merchant Wholesalers
- Suggested ISO General Liability Code: 11126
- Suggested Workers Compensation Code: 8032
SIC Code 5139 - Footwear
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of footwear (including athletic) of leather, rubber, and other materials.
- Athletic footwear-wholesale
- Shoe accessories-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all shoes 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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