Toy 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.
Toy Wholesalers & Distributors Insurance
Toy distributors receive plastic, metal, wood and fabric toy from foreign or domestic manufacturers for distribution to toy stores, department stores, discount stores and other retail establishments. The distribution center may be open 24 hours a day. Generally, the products are delivered to the customer on the distributor's vehicles.
Dolls, action figures, puzzles, electronics, blocks, cars; there are so many different types of toys, and as a distributor or wholesaler of these products, there's no doubt that you handle a large assortment of toys. It's also likely that you work with various clients, such as large scale chain business, small local establishments, and individual consumers, too.
Your goal is to make sure that the needs of your clients are met. In order to do that, it's important that all aspects of your business are properly handled. Orders need to be properly filled and distributed; inventory needs to be re-ordered and stored, any tools or equipment you use has to be maintained, your employees have to be properly trained, and your facilities need to be up-to-code to ensure a safe work environment.
Though you try your best to make sure that everything is properly handled, you never know when a mishap is going to occur. Things like property damages, personal injuries, equipment malfunctions, and legal disputes can arise. When they do, you can end up incurring a tremendous amount of expenses that you may not be able to cover. One of the best things you can do to ensure the success of your business is to plan for the unexpected; and investing in toy wholesalers & distributors insurance is one of the best ways you can do that.
Why Is Insurance Important for Toy Wholesalers & Distributors?
When the unexpected does happen, toy distributors and wholesalers can rely on their insurance to provide them with the financial protection they need. Liability expenses can be excessive; in fact, they can be financially crippling. If something does go awry and you are financially responsible, you can have peace of mind knowing that those expenses will be covered by your insurance carrier.
toy wholesalers & distributors insurance lets toy wholesalers recover from common risks quickly. Additionally, being properly insured assures that business owners in this industry are operating within compliance with the law, as many types of coverage are mandated. Furthermore, being fully insured can help to enhance the success of a toy distributor's or wholesaler's business because it provides anyone they work with peace of mind knowing that they if anything does go wrong, they will be able to cover the damages.
What Type Of Commercial Insurance Do You Need?
From commercial property to product liability, there are various types of insurance coverage that toy distributors and wholesalers should have in order to fully protect their businesses. While every organization is different and the needs of each organization will determine what type of coverage a business owner should carry, certain policies are essential for all toy distributors and wholesalers.
Examples of some of the forms of toy wholesalers & distributors insurance coverage you need to carry and should consider investing in include:
- Business income
- Commercial auto
- Commercial crime
- Commercial general liability
- Commercial property
- Cyber liability insurance
- Equipment breakdown
- Inland marine
- Officers and directors
- Product liability
- Workers' compensation
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: 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 Toy Wholesalers & Distributors
Property exposure comes from multiple ignition sources, open construction, and the combustibility of many types of toys and their packaging materials. Ignition sources include electrical wiring and equipment. All wiring must be well maintained and up to code for the occupancy. If there are any stocks of flammables, those should be kept well away from combustibles, preferably in a UL approved cabinet.
Good housekeeping and fire controls are critical. 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.
Values increase substantially during peak seasons. Theft is a major concern for "hot 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. Employee theft can be a problem for "hot" seasonal toy items. Appropriate security procedures should be in place. Physical inventories should be conducted at least annually.
Inland marine exposures come 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, 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 exposure is low if products are all from domestic manufacturers. The exposure increases if items are from foreign manufacturers as these are products intended for use by infants and children. All products must be clearly labeled with the age group and all must have passed federal standards for child safety.
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 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 may pose slip and fall hazards. Housekeeping is critical.
Insurance Classification Toy Wholesalers & Distributors
Commercial insurers classify toy 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: 5092 Toy and Hobby Goods and Supplies
- NAICS CODE: 423920 Toy and Hobby Goods and Supplies Merchant Wholesalers
- Suggested ISO General Liability Code: 18833
- Suggested Workers Compensation Code: 8018
SIC Code 5092 - Toy and Hobby Goods and Supplies
Here is the official OSHA SIC code description:
Establishments primarily engaged in the wholesale distribution of games, toys, hobby goods and supplies, and related goods, such as fireworks and playing cards.
- Craft kits-wholesale
- Games (including electronic), except coin-operated-wholesale
- Hobby kits-wholesale
- Model kits-wholesale
- Playing cards-wholesale
- Stamps, philatelist-wholesale
- Toys (including electronic)-wholesale
- Vehicles, children's-wholesale
Get A Wholesalers And Distributors Insurance Quote
Not all toy 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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