Commercial umbrella insurance for wholesalers and distributors

Lawsuits can be costly for any wholesale business – even to the point where your insurance policy can’t cover everything. Commercial umbrella insurance for wholesalers, similar to excess liability insurance, can make up the difference when a claim exceeds the limit of your underlying policy.

This policy supplements the coverage offered by:

• General liability insurance
• Commercial auto insurance or hired and non-owned auto insurance
• Employer’s liability insurance (part of workers' compensation insurance)

It used to be the case that only large wholesalers carried umbrella insurance. Now, small wholesale businesses are investing in this policy due to increasing legal costs and client requirements.

Consider carrying umbrella insurance if you:

• Need higher policy limits to meet a client's demands
• Need increased protection across several liability policies
• Interact with the public on a regular basis
• Have risks that merit higher coverage limits

When it comes to umbrella insurance, purchasing coverage from the same insurance provider who sold you the other policies is typically easier and more affordable.

When a wholesale business carries umbrella insurance, it increases the protection limits of your existing liability policies. For instance, you might have a general liability insurance policy with a $2 million per-occurrence limit. This means it can cover up to $2 million in legal expenses, judgments, and settlements on a single claim.

Now, say a shelf falls onto a client visiting your warehouse, who sues for the injuries. Between attorney’s fees and the court-ordered judgment, you owe $2.2 million. Umbrella insurance can pay for expenses that go over a policy’s limit, in this case paying for the extra $200,000.

Umbrella / excess liability insurance becomes active when your general liability insurance maxes out its policy limit. It can help with any general liability claim, including:

• Customer slip-and-fall injuries
• Customer property damage
• Advertising injuries, such as slander and libel

Umbrella insurance also covers claims on the general liability insurance portion of a business owner’s policy (BOP).

If a liability claim on your commercial auto insurance exceeds the policy limit, an umbrella insurance policy will pay the additional amount. It also extends coverage on hired and non-owned auto insurance for wholesalers who use a personal car for business purposes.

In an accident, it could help pay for lawsuits resulting from:

• Injuries you caused to others
• Damage to another person’s vehicle
• Damage to another person's property

If an employee is injured and files a lawsuit against the employer, employer’s liability insurance helps pay for legal expenses. Umbrella insurance expands that coverage.

For example, if a warehouse employee claims that your failure to provide proper lifting equipment led to a back injury, you could be held liable. When the legal costs exceed the employer’s liability portion of your workers’ compensation policy, your umbrella insurance policy would pay for the amount over the limit.

• Property insurance claims
• Expenses covered by an underlying policy
• Employee discrimination lawsuits

Similar to umbrella insurance, excess liability insurance can increase the limits of your professional liability insurance or errors and omissions insurance (E&O).

Umbrella insurance increases the protection of your existing liability policies. Wholesalers should consider:

General liability insurance: This policy can pay legal expenses related to customer property damage and injuries, along with advertising injuries such as slander.

Workers’ compensation insurance: Required in almost every state for wholesalers that have employees, workers’ comp can cover medical costs for work injuries.

Business owner’s policy (BOP): This policy combines general liability insurance and commercial property insurance, usually at a lower rate than if the policies were purchased separately.

Commercial auto insurance: This policy covers vehicles owned by your business. It typically pays for accidents and damages related to theft, weather, and vandalism.

Cyber liability insurance: Cyber insurance helps your business recover financially from data breaches and cyberattacks.

Surety bonds: This bond assures a wholesaler's clients that its insurance company will reimburse their losses if the business fails to fulfill a contract.

Are you ready to boost your coverage against lawsuits with umbrella liability insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.