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Warehouse insurance
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Warehouses are the heart of businesses like manufacturers, distributors, wholesalers, and more. They are where the products are kept, registered, and shipped around.
In some industries, like the beverage business, warehouses and distribution processes are required by law. A warehouse is a significant business investment, which would be a vast understatement.
There’s much to consider regarding damage and protection –workers, inventory, property, products, equipment, vehicles, and more. Physical, financial, and business damage are all things to consider. Warehouse insurance can seem complicated and expensive at first glance.
Insurance Navy is here to help make warehouse insurance policies easy and affordable.
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Why do you need Warehouse insurance coverage for your business?
Those shelves upon shelves of products meant for distribution, the space they are kept in, the equipment used to manage them, and the workers managing them will need insurance. A claim resulting from damage or injury from any of these areas will be any warehouse’s last.
So, where exactly do you start when it comes to a good Warehouse insurance policy?
First, consider Murphy’s law when running a warehouse by thinking about everything that can and will go wrong during business hours.
These are the following hazards and damages:
- Damage to the property, products, and equipment within the warehouse and on business grounds due to criminal or weather hazards
- Injuries and damages to third parties or individuals visiting the warehouse, along with damages that they unintentionally cause
- Stolen property and products as the result of thieves breaking in
- Damages and accidents involving a warehouse’s fleet of vehicles like trucks and vans
- Damages and injuries involving warehouse workers during business hours
- Equipment like forklifts breaking down or getting damaged and requiring repairs and replacements
- Products and shipments arriving damaged to the warehouse during transit
- The computer system that the warehouse uses to track shipments, inventories, and distribution is cyber-attacked, and data is breached.
- A product in distribution can be recalled, which costs the warehouse and company a loss of income.
These are just a few examples of what Warehouse insurance can protect your business from.
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How much does Warehouse insurance cost?
In any case of insurance, it’s challenging to find an average since the cost of coverage is highly personal.
When it comes to Warehouse insurance, it’s been reported that a square foot costs anywhere from $0.50 to $2.00 to insure with property damage coverage. General liability has been reported to cost at least $30 a month for warehouses, and that’s a very loose average. The insurance cost is an accumulation of all the coverage that the policyholder desires.
Because of this, warehouses need to pay special attention to their budgets. The good news is that bundling coverage saves on premiums, which they do with all the damages above.
With all the property kept within the warehouse, assets like vehicles, and the well-being of the employees – there are more than some opportunities for saving.
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Types of Warehouse Insurance Coverage
There is no specific type of warehouse insurance; it’s just used to describe the entire policy for the warehouses in question. Warehouse insurance is a collection of different kinds of insurance meant for commercial properties and workers.
The following are some of the most common and essential types of coverage warehouse owners and managers elect for their policies.
Commercial property insurance
The warehouses themselves are first and foremost when it comes to warehouse insurance policies. As commercial property is used for business, it is subject to all the usual protection that commercial property insurance regularly offers.
It’s more than just insuring the warehouse; the wares and property inside are also accounted for. This includes product, inventory, storage, and any equipment that assists with the organization and cataloging of them, like a forklift or physical computer with the latest edition of Windows installed on it.
This coverage fits any kind of warehouse like a glove. This can be those with automotive products, general goods, and even food kept in industrial freezers and refrigerators. Most weather conditions and criminal factors like robberies and vandalism cause general damage to the building and the property inside.
Even furniture and other supplies kept in offices that connect to a warehouse are included in the policy because they are considered part of the warehouse. Even the machines used to print shipping tags are covered.
This is the most essential insurance coverage for a warehouse and functions as the stepping stone of the policy.
General liability insurance
Several liability damages and claims can occur in a warehouse setting. Warehouse inspections and tours to see if they are up to regulation or a third party’s regular business visit can go awry if someone is injured or a worker damages their property.
General liability insurance is imperative in ensuring that medical fees, replacement costs, and even lawsuits won’t put a business in the red or out of service.
In a warehouse setting, liability damage caused by products and inventory is a readily available add-on. Advertising and copyright violations within are also covered by general liability for commercial establishments.
Plenty of opportunities exist to extend liability coverage to more specific things like product recalls or professional services. How much liability coverage a warehouse will need depends on its size and scope.
Workers compensation insurance
Warehouse workers and employees seldom sit at a desk throughout the day. They may be operating machinery to organize inventory or going through products that can cause them injuries or illness.
Workers' compensation insurance is often required for all these reasons and more. This would be the general liability coverage for anyone on the company’s dime. If an employee is injured on the job, any resulting medical, legal, and lost wages expenses are covered.
Warehouses need people’s power to organize and process orders and play an integral part in the business. Forklift drivers must often adhere to safety regulations and be certified to operate beforehand.
Workers' compensation has an insurance policy separate from the overall warehouse policy. However, both go hand-in-hand in a coverage package. Again, this coverage will more often than not be required by law.
Commercial car insurance
Several warehouses take the distribution job upon themselves with a fleet of delivery trucks or vans at the ready daily. Warehouses may also receive and send orders amongst themselves as well. Another heavily required insurance is car insurance, and when it comes to commercial vehicles, it’s no exception.
As with standard car insurance, all the full and basic auto coverages are available for a commercial auto policy. Even trailers and personal vehicles occasionally used for business can have coverage extended to them. Commercial non-owner car insurance is also an option.
Basic commercial car insurance is the required portion to insure any injuries or damage a warehouse driver causes to another while on a delivery or distribution run.
Full and optional commercial car insurance accounts for damages and injuries to employees and vehicles in an at-fault accident. At the same time, it’s parked and not in use. Additional coverage like roadside assistance insurance and rental vehicle reimbursement are also available.
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Additional types of Warehouse Insurance
The coverages above are what warehouses should get for all the broad and shared risks and damages that can occur in their day-to-day operations. Still, they don’t cover every little thing that can happen.
The following handy coverages are never required but can benefit most warehouses.
Transportation and Inland marine insurance
There is always the chance of products and inventory getting to the warehouse broken or not in the promised condition. Transportation coverage, or inland marine insurance as it’s sometimes called, covers products while they are in transit and get damaged in the process. This can be when they travel by road, air, or rail.
Additional coverage may be necessary if the products and shipments come from overseas. The alcoholic beverage industry thrives with this coverage, considering all the glass bottles that must be moved.
Business income insurance
This coverage is also known as business interruption insurance. Warehouses are one of the businesses that can’t afford to shutter their doors for even a little bit. Shipments and orders won’t be met, and inventory may need to catch up, resulting in serious financial setbacks.
Business income coverage usually ensures a business if damages force it to close for some time and miss the expected income. This is known as actual loss sustained basis and why business income insurance was created.
Product recall insurance
A product can be recalled by its maker even after the shipments have gone out and been paid for by warehouses. Having recalled products that can’t be sold is a hazard, especially if it is a big shipment. That’s why having product recall coverage in a warehouse policy is always a good idea.
The cost of replacing all lemon products with the improved ones and expenses related to advertising the product in question are covered. Every financial damage that they can cause is covered.
Cyber liability insurance
Nowadays, warehouse records are kept as digital files in a computer system or database constantly updated with sensitive product and customer information regarding orders. These systems are subject to cyber attackers as they attempt to steal sensitive information and documents.
Cyber liability insurance comes in to cover the recovery effort and any damages. Sensitive information regarding vendors and distributors is also at risk during cyber attacks.
Considering this coverage may be in a warehouse’s best interest, even if the computer system is used sparingly.
Equipment breakdown coverage
Forklifts, trash compactors, lifts, shelves, and even package labeling machines all have irreplaceable roles to play in a warehouse. If something breaks or is damaged, that not only can set a warehouse back with the workload but also costs them to fix and even more to replace.
Equipment breakdown insurance comes to the rescue to cover these costs. Warehouses dealing with perishable goods and food in refrigerators and freezers that break down can significantly benefit from this coverage.
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Warehouse insurance coverage from Insurance Navy
Insurance Navy understands just how much insurance can feel like in terms of the necessary coverage and how much it will cost and tries to increase those opportunities for saving.
We pride ourselves on applying the same competitive and budget-orientated approach we use for car insurance to business insurance.
Warehouse services are essential because other businesses, like wholesalers, rely on them. Performing such a critical service shouldn’t be a luxury to insure.
Start with a free online Warehouse insurance quote for your warehouse or distribution business today and see how much you can save as a policyholder with us.