Your money is sitting in a warehouse, a container and a truck all at once.
Distribution is a stock business, and stock moves. The biggest exposures are the value of goods at the wrong moment and the gaps between the places they sit, and a policy written for a shop will not follow them.
Build the operations file What’s covered Talk to a brokerWarehouse, stock, goods in transit, product liability and recall
Wholesalers, distributors, importers and warehouse operators
Your stock values by month and where goods are stored
What insurance does a wholesaler or distributor need?
Four things carry most of it. Property cover for the warehouse and the stock inside it. Goods in transit for everything moving in and out. Product liability, because a distributor can be pulled into a claim over goods it sold but did not make. And business interruption for the income lost if the warehouse is unusable. Cyber and funds-transfer fraud sit close behind, because distribution runs on invoices, and an invoice is exactly what a fraudster imitates.
Stock insured at an average value means a loss in your peak season is underinsured by the difference. And goods sitting in a third-party warehouse that was never declared are simply not covered. Health Canada makes every link in the chain responsible: “Suppliers of consumer products are responsible for ensuring the products they place on the Canadian market comply with the Canada Consumer Product Safety Act”. A wholesaler places products on the market. That is the exposure. Read Health Canada’s questions and answers on the Act (opens in a new tab).
Cover that follows the goods.
Warehouse and premises
Building or tenant’s improvements, racking, handling equipment and the contents around the stock.
Stock, valued seasonally
Peak-season provisions so you are not underinsured in your busiest month or overpaying all year.
Goods in transit
Inbound from suppliers, outbound to customers, on your vehicles or someone else’s.
Stock held elsewhere
Third-party warehouses, overflow units and consignment stock at a customer’s site.
Product liability
Harm caused by goods you sold. A distributor is often the only party a claimant can reach when the maker is overseas.
Product recall
Retrieving and replacing a bad batch. Excluded from standard liability and bought separately.
Three gaps specific to distribution.
These come from the shape of the business rather than from bad luck.
Stock insured at an average
A fire in your peak month against a sum insured set for a quiet one. The shortfall is entirely yours.
The handover points
Cover can lapse between the carrier’s responsibility and yours. Terms of sale decide who carries the risk, and both sides often assume the other does.
Liability for what you did not make
Importers and distributors are routinely named in product claims. Ask what your supply agreements actually say about indemnity.
How this can play out.
A fire in October destroys stock built up for the Christmas season. The sum insured was set on an average month. The difference between the average and the peak is the part you fund yourself.
Wholesale insurance is largely a numbers job.
The wording matters less here than the values.
Most wholesale policies are broadly similar in what they cover. What differs is whether the stock figure reflects your real seasonal peak, whether goods in transit and off-site storage were actually arranged, and whether the indemnity period matches how long it would take to replace a warehouse and restock it.
So we will spend the time on your numbers rather than on a brochure. Bring your stock figures by month if you have them, that single document changes the quality of the cover more than anything else.
The conditions inside wholesale and distribution cover.
Distribution risk moves: stock levels, customers, carriers and borders all shift monthly. The wording expects the declarations to move with them.
The peak the policy never saw
Stock declared at the annual average burns at the seasonal peak. Distribution warehouses have their worst month exactly when they are fullest.
Customers’ goods on your racks
Holding stock you do not own is a liability the standard property form does not fully answer. The contracts with those customers decide what you owe, and the policy should match them.
Carriers chosen on price alone
What a carrier legally owes for a lost load is capped low. Shipping without your own cargo cover means the cheap carrier quote was subsidized by your risk.
The border in the fine print
Goods sold into the United States meet a different liability system. Contracts, recalls and limits sized for Canada can be undersized the day the truck crosses.
A quarterly look at stock peaks, storage contracts and carrier terms. Check that the declarations still match the season you are actually in.
What distributors ask us.
My stock value changes a lot through the year. How is that insured?
Tell us the pattern rather than an average. Policies can carry peak-season provisions so you are covered in the busy month without paying that level all year.
Do I need product liability if I only distribute?
Usually yes. A distributor can be named in a claim over a product it sold but did not make, particularly where the manufacturer is overseas or no longer trading.
Is my stock covered while it is in a third-party warehouse?
Only if arranged. Off-site and overflow storage is an easy gap to leave open in distribution, and it is simple to fix once someone asks the question.
Who insures goods in transit, me or the carrier?
Carrier liability is limited and fault-based, so it rarely covers the value of the goods. Cargo cover insures the goods themselves regardless of who is to blame.
Does my policy cover a product recall?
Usually not. Standard product liability covers harm the product causes, while retrieving and replacing stock is separate recall cover.
A customer’s contract demands specific insurance. Can you check it?
Yes, send it over. Supply agreements often require limits, additional insureds and wording a standard policy will not automatically satisfy.
Do you only cover wholesalers near your offices?
No. Our licence covers British Columbia, so a warehouse in Kelowna or a distributor on Vancouver Island is inside it. Where your stock sits, and where it travels, is what we need to know. That is a question about the policy, not about how close you are to a counter in Vancouver, Delta or Surrey.
Running your own delivery vehicles? fleet insurance.
The questions behind the questions.
Bring your stock figures.
By month if you have them, plus where goods are stored and how they move. That is the starting point.
Stock and cash passing through many hands. crime & employee theft.