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Distributors: Insurance for Perishable Goods

Post written by: Eric Arnholt

Are commercial distributors’ perishable goods insured against spoilage?

It depends.

Types of Commercial Distributors


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Distributors are typically merchants or intermediaries that sell products to industrial and commercial users, as well as resale/retail stores and dealers. Although all distributors might fit this basic description, their actual operations can be very unique.

The type of products handled distinguishes one distributor from another. One may choose to specialize in a particular product line such as janitorial supplies or auto parts, and sell to retailers or commercial users. Another may distribute beverages or frozen foods to restaurants or grocery stores. Some operations are single locations, while others have more than one location with a few chain operations.

It’s common for a distributor to provide delivery of products to their customers. Some own and operate their own commercial auto fleet, while others utilize the service of common carriers to accomplish this. In the age of just-in-time service and inventory control, prompt deliveries of undamaged goods can be as important as the quality of the products themselves.

Liabilities of Distributing Perishable Goods

Although distributors can be very diverse, businesses handling any type of perishable goods face a common loss exposure: Spoilage.

It might seem like refrigeration breakdown expense would cover spoilage. In reality, it only covers defined expenses to avoid the imminent spoilage of refrigerated goods due to a breakdown of refrigeration equipment. This might only apply when the property is in a transporting vehicle, and may depend on who owns the vehicle. In either case, if the property spoils, the loss is not covered.

The commercial property spoilage coverage endorsement form covers spoilage, but typically only at the described premises. Property in transit coverage applies during transport, but may exclude spoilage as a covered cause of loss. Other forms may include spoilage while in transit, but coverage only applies to property of others being transported by the insured.

There is no doubt that distributors, particularly those transporting perishable goods, have specific insurance needs. Depending on the distributor and the type of goods they sell or distribute, binding the right coverage and adding the proper endorsements can be the difference between success and failure of the business.

Business owners should consider the services of a knowledgeable insurance agent with expertise in this area to ensure proper coverage for their individual operations. Due to the diversity among distributors, there is value in having a choice of coverage options that can be customized with increased limits for some exposures or with additional endorsements for each unique operation. Agents who partner with insurance carriers that offer customized products can often provide the best value and cover all the bases, especially when perishable property is being transported.

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5 Responses to Distributors: Insurance for Perishable Goods

  1. It is so important to contact an insurance agent for any business insurance coverage but especially one which could result in significant losses.

  2. Ana Armada says:

    Need to find insurance coverage for perishable product (Frozen meats) we store in Cold Storages in various states (IL, GA, DE)
    Kindly advise asap. Tks!

    • kristin taylor says:

      Hi Ana, thanks for your comment! Please refer to our Agent Locator to find a Westfield Independent Agent who would be able to advise you of your options for covering your perishable products.

  3. You made a good point about how distributors will have very specific insurance needs depending on what perishable goods they are transporting. I would imagine that a beverage supplier would have different needs than someone who supplies dry goods. I never even thought about how food and drinks are delivered before. It is good to know that even these products can be insured.

    • Rob Koszkalda says:

      Thanks for the comment Kairi. You are right, it is interesting how the insurance needs may vary supplier to supplier depending on the industry.Thanks! Rob K.

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