A guide to vendor liability insurance requirements

Liability insurance can protect vendors, exhibitors, and concessionaires from a variety of common business risks such as injuries, property damage, and lawsuits. It’s often required by venues where vendors sell or display their goods.

Most trade shows, farmers’ markets, art fairs, ballparks, and universities require vendors to carry certain types and amounts of liability coverage.

What types of vendors need a liability insurance policy?

Anyone who deals with the public is at risk of a liability lawsuit. Someone could sue over a bodily injury, damaged property, or any number of reasons.

Those serving food face a great deal of liability risk. This includes food trucks and other food vendors, as well as other vendors such as bakeries or ice cream shops.

A customer could trip over your display. Your cooking equipment could catch fire. Produce sold at a farmers’ market or a roadside stand could be contaminated and cause an illness.

Artisans and other vendors who sell homemade crafts, candles, jewelry, or any other goods could also face a lawsuit. A table or booth could collapse, injuring a customer. Someone might sue, claiming they were harmed by one of your products. A competitor might claim that you stole one of their designs.

Even exhibitors at a conference, tradeshow, or other special events face risks of third-party injuries or property damage. Fortunately, there are a variety of vendor insurance options available to help protect your business from liability lawsuits.

What amount of vendor insurance will a venue require?

Many venues will specify the type and amount of liability insurance coverage they require. It’s a good idea to check with any places you’ll be setting up shop, to make sure you have enough protection.

Typically, you’ll need to sign a vendor contract to sell goods or services at a venue. The contract will specify rules and requirements, including the types of insurance they require and any minimum amounts.

If insurance is required, the venue will likely provide a minimum per-occurrence limit (coverage for a single claim) and aggregate limit (coverage for all claims combined).

Often, an event organizer will ask you to provide a certificate of insurance from your insurance company as proof of insurance.

What is an additional insured?

Many venues require to be named as an “additional insured” on your general liability policy and other coverages. Even if the facility carries their own event insurance, this additional insured endorsement under your policy offers added protection for the venue against liability claims over any harm caused by your business. This typically comes with an additional cost.

What vendor insurance coverage should you consider?

Even if a venue doesn’t require vendor insurance, it can be a smart investment for your vending business. Let’s consider the types of liability protection you might need for your business, and what they cover.

General liability insurance

General liability insurance is one of the most common types of small business insurance, and it’s often required by venues. It provides liability coverage and financial protection from common business risks.

If a shopper suffers a personal injury while visiting your booth, it would be covered by this policy. It also covers you if a customer falls ill after eating food you served at an event.

In addition, this policy will pay for legal costs and judgments if a competitor sues you for an advertising injury, defamation, or copyright infringement.

Commercial property insurance

A commercial property insurance policy covers the repair or replacement of damaged or stolen business property. This could include any commercial spaces you own, as well as supplies, equipment, and inventory that you take to special events.

This coverage is particularly important for restaurants that must bring expensive equipment to events or artisans with high-priced inventory.

Business owner's policy

A business owner’s policy (BOP) combines general liability and commercial property insurance under one policy, usually at a savings. It covers third-party lawsuits from customer accidents and damage to your property, such as fire and burglaries.

Product liability insurance

Product liability insurance protects you from any lawsuits over claims that a product you sold or made caused sickness, injury, or property damage.

If you’re an artisan or other retail vendor, you might consider this policy.

Commercial auto insurance

Commercial auto insurance covers accidents involving vehicles used for your business, including food trucks or delivery vehicles. It may also cover the cost of theft and vandalism.

Commercial auto insurance is typically required by state law, but if your business depends on your vehicles, you should consider a comprehensive insurance policy.

In addition, if you use your personal vehicle for business purposes, your regular auto insurance policy usually won’t cover any mishaps that occur during business use.

Liquor liability insurance

Liquor liability insurance is often required for vendors selling alcohol. It covers legal fees, property damage, and medical costs if alcohol is sold to a visibly intoxicated person who damages property or injures people.

If your microbrewery or bar provides liquor for special events, you’ll want to confirm that your liquor liability policy still provides coverage at any venue.

Cyber liability insurance

It might seem unusual for a vendor to consider cyber liability insurance, although anything can happen in today’s interconnected world. This coverage protects you from the cost of a data breach, cyber hacking, or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.

Workers’ compensation insurance

Workers’ compensation insurance is required in almost every state for businesses with employees. It helps cover medical bills and lost wages for work-related injuries and illnesses.

Commercial umbrella insurance

Commercial umbrella insurance raises the policy limits on your general liability, commercial auto, or employer's liability insurance policies. It also boosts the limits of your underlying policy.

While unusual for smaller venues, this coverage is not unheard of when doing business with a university, a hospital, and other large venues.

No matter your business, there’s a wide range of affordable vendor insurance options available to protect your venture and help it thrive.

Complete Insureon’s easy online application today to compare quotes for business insurance from top-rated U.S. carriers. Once you find the right insurance policy for your small business, you can begin coverage in less than 24 hours.