Workers’ compensation insurance for wholesalers and distributors

No matter your wholesale specialty, on-the-job accidents happen, and sometimes they're severe. From an office clerk suffering carpal tunnel syndrome to a warehouse worker’s herniated disc, it's the employer’s responsibility to cover medical expenses.

Workers’ compensation insurance pays for medical bills and partial lost wages when an employee is injured on the job or develops an occupational illness.

• Immediate medical costs, such as emergency room expenses
• Ongoing medical costs, such as medications
• Partial lost wages while the employee is unable to work

Typically included in a workers’ comp policy, employer’s liability insurance provides protection when an order clerk, packager, or other wholesale employee decides to sue a business owner over an injury.

Employer’s liability insurance can help cover:

• Attorney’s fees
• Court costs
• Settlements

Without proper coverage, you may find yourself paying for a costly legal defense, even if the lawsuit is meritless. Note that employer’s liability insurance does have limits to how much it will pay for a lawsuit.

The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).

The formula is:
Classification rate x Experience modification rate x (Payroll / 100) = Premium

Each state has its own laws for workers’ compensation requirements. For example, every wholesale business in New York must carry workers’ compensation insurance for its employees – even part-time workers. Alabama wholesale businesses are only required to carry workers’ compensation when they have five or more employees.

Sole proprietors, independent contractors, and partners don’t have to carry workers’ compensation insurance, but they can purchase a policy to protect themselves, too. It's a good idea, as health insurance can deny claims for injuries related to your job, which could leave you with expensive medical bills.

In certain states, wholesale businesses must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase workers’ comp through a monopolistic state fund, it probably won't include employer’s liability insurance. However, you can buy stop gap coverage from a private insurer to gain this protection.

Wholesale employees are exposed to many daily risks, including lifting accidents and repetitive motion injuries. Whether you’re the owner of a merchant wholesale company or a full-service wholesale business, you can create a safer work environment with:

• Employee safety training
• Prompt cleanup of spills
• Safety equipment, such as gloves and goggles
• Moving equipment, such as dollies and skates
• Elimination of clutter and other hazards

By maintaining a safe work environment, you can decrease workplace accidents. That means fewer claims – and a lower insurance premium.

Workers’ compensation insurance protects your employees and to some extent your business, but it doesn’t cover property damage, client injuries, and other common risks. Other recommended wholesaler insurance policies include:

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

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

Commercial umbrella insurance: Similar to excess liability insurance, this policy boosts coverage on a general liability, employer’s liability, or commercial auto insurance policy once the coverage limit is reached.

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 wholesale business’s clients that its insurance company will reimburse their losses if the business fails to deliver contracted services.

Are you ready to safeguard your wholesale business with workers’ compensation or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.