The hobby industry is booming, with wholesale distributors at the heart of it. This sector is expected to generate around $45 billion in revenue, making it crucial for businesses to protect their valuable inventory. However, with great opportunity comes significant risk. Distributors face unique challenges depending on what products they handle, from delicate antiques to flammable crafting supplies.
Deidra Hoschak, a senior underwriter at Central Insurance, emphasizes the importance of having the right insurance for these businesses. Commercial property insurance is essential, as it covers buildings, inventory, and contents against risks such as fire, theft, and weather damage. Given the high volumes of inventory many distributors store, managing these risks is a priority.
Antiques present a special challenge. Unlike mass-produced items, unique pieces like an 1800s vase are hard to replace. Insurers often require appraisals and specific valuation methods for such items, as the risk assessment takes into account the likelihood and potential severity of claims.
Product liability insurance is another critical area for toy distributors. Even if they are not the manufacturers, distributors can still be held liable if a product causes injury. This coverage is often included in general liability policies but is especially important for those dealing with children’s products.
In addition to these, a comprehensive insurance portfolio for wholesale hobby distributors may include several other policies. General liability insurance protects against third-party claims for bodily injury or property damage. Inland marine coverage is vital for businesses that transport goods, providing protection while products are in transit. For those using vehicles for deliveries, commercial auto insurance is necessary to cover accidents and damages.
Moreover, distributors who provide additional services like packaging or assembly need to be cautious. Any manipulation of products can lead to increased liability, potentially changing how their insurance classifies the business.
Central Insurance advises distributors to choose their insurance partners wisely. With nearly 150 years of experience, they understand the specific risks in the hobby distribution space. Their network of independent agents offers tailored support, ensuring businesses are well-protected against various risks, from fire hazards to product liability and cyber threats.
As the hobby industry continues to grow, distributors must stay informed and proactive about their insurance needs to safeguard their operations and assets effectively.