Common Risks Faced by Wholesalers
In the business world, risks confront nearly every operation. Wholesalers, like their counterparts in the retail sector, face certain risks that can negatively impact business assets. As a risk management tool for wholesalers in the state of Utah, Utah wholesalers insurance represents a foundational component. Understanding the risks faced by wholesalers is another means of mitigating those risks. In this guide, we will explore common wholesalers’ risks in order to give wholesalers the information they need to make smart risk management decisions.
The Wholesale Environment
Utah is home to thousands of wholesaling operations ranging from small companies with nine or less employees to those with 500 or more employees on payroll. According to statistics compiled by the United States Census Bureau in their semiannual County Business Patterns (CBP) reports, growth in the nondurable goods and wholesale markets held relatively steady from 2012 to 2017, experiencing slight growth toward the end of the statistical period. No matter how large or small, each of these wholesalers faces significant operational risks. The protection of Utah wholesalers insurance provides a safety net against risks by shielding business assets against loss claims.
Common Wholesalers Risks
Although some wholesalers face unique or unusual risks based on the goods being handled, most wholesalers experience common risk exposures in their operations. The most common wholesalers risks include:
Product liability – even if wholesalers are not responsible for the manufacture of a product, they may still be held liable if wholesaled products are found to be unsafe or defective.
Supply chain issues – reselling of products on the wholesale market can be interrupted if there are breaks in the supply chain. These breaks can come from manufacturing, distribution, and transportation, and may impact business operations over the long term in severe cases.
Property damage – many wholesalers operate large facilities with hundreds of thousands or even millions of dollars in inventory. Damage to that inventory can be devastating, particularly in cases of natural disasters, fire, or criminal activity.
Legal liability – wholesalers often rely on contracts between manufacturers and retailers. If there are disputes in contractual performance, the wholesaler may be caught in the middle, resulting in exposure to legal claims between parties.
Data losses – as computerized customer and inventory tracking systems continue to revolutionize industries, a new risk profile has emerged: cyber crimes. The loss of sensitive business data through accidental or intentional acts can expose wholesalers to unforeseen risks, putting financial assets in jeopardy without the protection of Utah wholesalers insurance.
Crime – in the retail and wholesale environments, crime can have an outsized impact on business operations. Businesses with physical inventories in the United States experience millions of dollars in losses each year to theft alone. Vandalism, insider crimes, and scams account for millions more in damages or losses.
Faced with these risk exposures, it is abundantly clear that broad insurance solutions are a necessity. Retailers and wholesalers may occupy different niches in the business community, but the similarities between their risk profiles cannot be overlooked. Just as retailers protect themselves against liability claims, so too can wholesalers. Comprehensive Utah wholesalers insurance policies protect against general and product liability claims as well as errors & omissions, employment practices, and pollution liabilities, only to name a few of the many benefits of these policies. Wholesalers in the state of Utah can continue with operations, knowing that their assets are protected no matter what risks these businesses face.
About BTC Insurance Services
Founded in 2011, BTC Insurance Services has proudly served Utah businesses with comprehensive and custom-tailored insurance coverages for a decade. We pride ourselves on fostering long-term client relationships with a personalized and hands-on approach, and have established a reputation built on quality and transparency. For more information about our products and services, we invite you to contact one of our reputable agents today at (855) 944-3457, or send us a message here.
