Retail Liability and Insurance

In addition, get insurance evidence from suppliers. One way to shift risk is to have your suppliers give you evidence of their product liability insurance and have them add your company as an “additional insured” on their policy (the so-called vendor’s coverage). For retailers, this would most often involve requesting this insurance from either your contract manufacturer, or a wholesale distributor who is supplying you with finished products to sell. “Additional insured” status on your suppliers’ policies will provide you with coverage under their policy in the event both of your companies are sued for a covered claim and it is ultimately determined that they, not you, were the cause of the injury. It will insulate you and your insurance company from having to pay a loss, which is only right if you did nothing wrong in the first place. It will keep your loss record spotless, reducing your future insurance costs. For these reasons, you should be wary of suppliers that do not carry liability insurance—and there are many that still do not. Gathering and monitoring certificates of insurance is well worth the time. In addition, there are at least two companies that will gather and manage certificates of insurance on your behalf.

Other Business Insurance

Additional insurance you should consider includes, but isn’t limited to: business personal property; automobile liability; workers’ compensation; and employment practices.

Business personal property insurance covers the contents and personal property at your premises from exposures, such as fire and theft. Many dietary supplement companies mistakenly assume their products are covered by another party (e.g. at the warehouse where goods are stored). Categories of personal property include stock, contents except stock, machinery and equipment, furniture, fixtures and tenant improvements, and betterments. There’s also coverage that affords coverage while your property is in transit (inland and ocean marine coverage).

Automobile insurance insures against loss through legal liability for bodily injury or property damage, caused by accident, and arising out of the ownership, maintenance or use of motor vehicles. Most states have statutory laws regarding automobile liability. Your operation may not own autos, but it is difficult to imagine a commercial operation that does not have some type of automobile liability exposure. The source of possible loss may be from any of the following: owned autos; leased vehicles; hired (rented) automobiles or equipment; non-owned (borrowed) vehicles; and certain types of mobile equipment.

Workers compensation is mandated by statutory laws. Workers comp insures against claims for work-related injuries or diseases suffered by employees that are compensable by statute and/or imposed by law as damages.

Employment Practices Liability (EPL) covers lawsuits brought by employees alleging wrongful discharge, discrimination or certain types of harassment. Any employer, regardless of size, can be subject to time-consuming and expensive litigation in these areas. Even a proactive, people-minded employer that has implemented stringent procedures and standards may face complaints or lawsuits from current or former employees. No employer is safe. Specific awards are high and financially crippling and punitive damage awards are also common. The more employees an organization has, the more punitive damages that can be awarded.

Greg M. Doherty is the dietary supplement practice leader at Poms & Associates Insurance Brokers Inc. in Woodland Hills, Calif. Poms & Associates is a full service, commercial lines brokerage and is a member of the Consultants Association for the Natural Products Industry (CANI) and the American Herbal Products Association (AHPA). Doherty can be reached at (818) 449-9317 or at GDoherty@pomsassoc.com.

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines