Wholesalers & Distributors
When it comes to risk, many insurance carriers view wholesalers & distributors in the same legal environment as the manufacturers themselves. This is due in large part to the fact that, when it comes to litigation, wholesalers and distributors can be equally vulnerable to product liability claims due to laws imposing strict liability for product defects and failures. These laws can hold the manufacturer, wholesaler and retailer all liable. In cases where the manufacturer is located abroad, your company will likely be the first named in a suit due to the lack of jurisdiction and inability to reach the foreign manufacturer. Technological advancements and industry trends are also compounding the risks faced by wholesalers:
- Supply chains are becoming longer, more digital and more global, introducing the opportunity for supply chain failures due to political unrest, natural disasters and cyber breaches.
- Cloud based data management cloud and logistics software software solutions are succeptable to malicious attacks which could result in an interruption of operations
- Compliance with changing custom laws and laws regarding labeling, packaging and product safety continue to evolve creating compliance challenges
- Introducing value added services such as repackaging, relabeling, specialized warehousing and logistics offerings increase risk
Due to maintaining a similar risk profile to manufacturers, wholesalers often share very similar insurance requirements. These portfolios are heavily centered around product liability and property/cargo insurance branching out to executive liability and specialty products to provide protection against claims of financial damages from clients and insulation for the executives. As each wholesale operation differs however, so do their risk management needs and insurance portfolios. Food and beverage wholesale operations may require a layer of product recall insurance, whereas an apparel wholesaler may be better served by an excess layer of D&O or crime. We work closely with our wholesale clients to build well structured programs that address international exposures, brand & reputational risk and executive & management liability exposures.