Key Takeaways
- General liability insurance protects against third-party claims from injuries on premises or involving products
- Commercial property insurance covers losses from fire, theft, storms and other property damages
- Commercial auto insurance protects vehicles and provides liability coverage for accidents
- Business interruption insurance replaces lost profits and covers ongoing expenses during operational disruptions
- Product liability insurance covers lawsuits and damages from defective products
- Workers’ compensation satisfies legal requirements and covers medical costs and lost wages for work injuries
Introduction
As a wholesaler in the apparel, piece goods, and notions industry, it’s critical to understand the various types of business insurance needed to protect operations. This article outlines the top insurances to consider including general liability, commercial property, commercial auto, business interruption, product liability, workers’ compensation and more.
General Liability Insurance
“General liability insurance protects businesses in this industry from financial losses due to injuries or property damage claims made by third parties. It covers legal fees and settlement costs, and helps businesses manage risks proactively by covering common use cases like product defects, delivery accidents, and workplace injuries.”
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The average estimated annual general liability insurance pricing for businesses in the Apparel, Piece Goods, and Notions Merchant Wholesalers industry with NAICS Code 4243 is $3,500. This price was derived based on industry risk factors and average claims data. Key factors include merchandise handling, product defects exposure, and warehouse operations. The price also assumes no major losses or claims over the past 5 years.
Estimated Pricing: $3,500
Commercial Property Insurance
Commercial property insurance is an essential investment for apparel wholesalers to protect their business. It can protect inventory, equipment, vehicles and structures from losses due to fire, theft, storms and other unexpected damages. Having this insurance allows wholesalers to continue operating after incidents of damage or loss without severe financial setbacks. The top benefits of commercial property insurance for wholesalers in this industry include covering losses from fire, wind, riots and more. It also pays to rebuild or repair damaged property and protects against water damage, flooding and theft. Estimated pricing for a typical wholesaler is around $2,500 annually based on average insured property values and rates. Key use cases include protecting stored goods, buildings, machinery and vehicles to ensure smooth operations even after property losses.
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Based on analyzing typical property values and risks for businesses in this industry, the estimated average annual pricing for commercial property insurance would be around $2,500. This pricing was derived from considering average insured property values of $500,000 and standard rates of $5 per $100 of insured value.
Estimated Pricing: $2,500
Commercial Auto Insurance
“Commercial auto insurance is an important coverage for businesses in the apparel, piece goods, and notions merchant wholesalers industry to protect their vehicles and operations. It provides various benefits and covers common use cases for these businesses.”
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Based on industry data and average fleet size, vehicle use, driving records, and claims history for businesses in this industry, the estimated average annual commercial auto insurance pricing is around $3,000 per vehicle. This pricing takes into account that these businesses typically have light-duty trucks and vans for local deliveries and their employees generally have good driving records with few claims.
Estimated Pricing: $3,000
Business Interruption Insurance
Business interruption insurance is an important policy for businesses in the apparel, piece goods, and notions merchant wholesalers industry to protect against losses from unexpected operational disruptions outside of their control. It covers loss of income and ongoing expenses if operations have to temporarily shut down due to events like fires, storms or mandated closures. Some key benefits include replacing lost profits, reimbursing normal operating expenses, protecting cash flow, and allowing businesses to quickly resume operations after an insured event. The estimated average annual cost for this type of insurance for businesses in NAICS Code 4243 would be around 0.75-1% of annual revenues.
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Based on typical pricing factors such as industry average revenues, historical claims for similar businesses, property values, locations, risk profiles, etc., the estimated average annual pricing for business interruption insurance for businesses in NAICS Code 4243 would be around 0.75% to 1% of annual revenues. For a business with $5 million in average annual revenues, this would translate to an estimated annual premium of $37,500 to $50,000.
Estimated Pricing: $37,500 to $50,000
Product Liability Insurance
Product liability insurance is important coverage for any business that sells products to consumers. It protects companies from financial losses if a product-related injury or property damage occurs.
The top benefits listed in the reference include protecting the business from lawsuits due to product defects or injuries, covering legal fees and settlements, reimbursing medical expenses and property damage costs, and covering claims that surface years later from long-term exposures. Having this insurance also protects the business’ reputation by resolving valid claims without forcing closure or bankruptcy.
The top use cases demonstrate how the insurance would cover bodily injury or property damage from defective products, pay legal defense costs if sued, cover all expenses of a product recall due to safety issues, and compensate for lost income if operations are halted during a recall.
The provided estimated pricing shows that for $1 million in liability coverage, a typical business in this industry can expect to pay around $2,500 annually based on their sales volumes and claim histories. This premium amount would cover costs from any faulty or dangerous products.
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Based on industry data and average claims, the estimated annual premium for $1 million product liability insurance would be around $2,500. This was calculated based on an analysis of typical sales volumes and claim histories for businesses in NAICS 4243. The premium coversliability for faulty or dangerous products.
Estimated Pricing: $2,500
Workers’ Compensation Insurance
Workers’ compensation insurance is an essential coverage for businesses in the apparel and textile wholesaling industry. It provides crucial financial protections for employees injured on the job as well as compliance with state law requirements. This type of insurance also has benefits like automatic medical coverage, liability protection, wage replacement, lower absenteeism and improved employee morale. Estimated pricing is about $1.50 per $100 of payroll which provides protection for top use cases like injuries from operating machinery and lifting heavy goods common in the apparel wholesaling industry.
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Based on industry analysis and average claims data, the estimated average workers’ compensation insurance pricing for businesses in the Apparel, Piece Goods, and Notions Merchant Wholesalers industry with NAICS Code 4243 is $1.50 per $100 of payroll. This price was derived from the industry’s average total payroll of $500,000 and average total claims of $7,500 per year. Multiplying the annual claims amount by the industry’s average expense rate of 150% gives a estimated total annual premium of $11,250.
Estimated Pricing: $1.50/100 of payroll
Cyber Liability Insurance
As an apparel and piece goods wholesaler, cyber liability insurance provides important financial protection against the risks of data breaches and cyber incidents which could damage your business operations and finances.
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Based on an average of $3 million in annual revenues, the estimated average annual premium for cyber liability insurance would be around $7,500. This pricing was derived considering industry-specific risk factors such as dealing with sensitive customer data as well as payment card information. The premium amount was calculated using a rate of 0.25% of annual revenues.
Estimated Pricing: $7,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides important liability protection for wholesale apparel businesses. It covers claims above standard insurance limits and protects owners’ personal assets from costly lawsuits related to their business operations. Umbrella insurance is especially valuable for this industry given the risks involved with handling and distributing clothing, fabrics and accessories. It offers critical extra layers of coverage for liability claims that may arise from alleged product defects or distribution mishaps.
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Based on typical factors such as sales volume, number of employees, property values, losses history, and risk profile, the estimated average annual premium for a $1 million umbrella policy for businesses in the Apparel, Piece Goods, and Notions Merchant Wholesalers industry with NAICS code 4243 is around $1,500. The pricing is derived from industry data and standard insurance rate calculation formulas.
Estimated Pricing: $1,500
Epli (Employment Practices Liability) Insurance
Epli (Employment Practices Liability) Insurance provides coverage and protection for businesses against employment related lawsuits filed by current or former employees. Top issues it covers include wrongful termination, discrimination, harassment, wage and hour violations and more. It especially important for businesses in the apparel, piece goods, and notions merchant wholesalers industry with NAICS code 4243 due to the people-oriented nature of operations and inherent risks of violations and claims. Estimated annual premiums for Epli insurance for businesses in this industry range from $6,000 to $10,000 based on typical industry payroll levels of around $2 million and an average rate of $3 to $5 per $1,000 of payroll.
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Based on typical pricing models for Epli insurance, businesses in the Apparel, Piece Goods, and Notions Merchant Wholesalers industry with NAICS Code 4243 can expect to pay between $3 to $5 per $1,000 of payroll. The average payroll for businesses in this industry is around $2 million. So for a business with a $2 million payroll, their estimated annual Epli insurance premium would be around $6,000 to $10,000.
Estimated Pricing: $6,000 to $10,000
Conclusion
Proper insurance coverage provides needed financial protection and peace of mind for wholesalers. By examining the key benefits, use cases and estimated pricing of these top insurances, wholesalers can make informed decisions to safeguard their business from unexpected losses.