Durable goods, such as appliances, electronics, and furniture, play a crucial role in both households and industries. The U.S. Census Bureau reports that the durable goods manufacturing sector is worth $2 trillion, making it a key part of the national economy. Businesses involved in this sector, whether they manufacture or distribute these long-lasting products, are essential for supporting various industries, including construction and retail. However, operating in this field comes with significant risks due to high-value inventory and the need for specialized handling.
Rachel Pinsonneault, a commercial lines underwriter at Central Insurance, highlights the common risks faced by businesses in the durable goods sector. While distributors may not be involved in manufacturing, they are vital in connecting manufacturers with retailers. They manage large inventories and ensure timely delivery while maintaining quality and safety.
Key risk areas for these operations include:
- Storage & Inventory Risks: Improper stacking or poor aisle management can lead to injuries or inventory loss.
- Property Exposure: Large facilities filled with valuable goods are at risk from fire, theft, and environmental factors.
- Product Damage: Even durable goods can be damaged during storage or transport, leading to costly replacements.
- Workplace Safety: Warehouse work often involves repetitive lifting and equipment use, increasing the likelihood of workers’ compensation claims.
- Liability Gaps: If a product causes harm after being sold, the distributor may face legal claims.
To mitigate these risks, Pinsonneault offers six practical loss control tips for durable goods businesses:
- Rethink Your Storage Strategy: Use stable shelving and secure heavy items. Avoid overstacking and keep walkways clear for safe forklift use.
- Prioritize Facility Safety & Security: Regularly check fire suppression systems, install security measures, and conduct inventory audits to prevent theft.
- Make Safe Handling Standard: Train staff on ergonomic lifting techniques and provide equipment like carts and forklifts to reduce strain.
- Invest in Employee Training: Offer regular safety training and encourage a culture of hazard reporting.
- Account for Peak Season Inventory: Ensure your insurance policy adjusts during high-demand periods to protect additional stock.
- Review Transportation and Logistics Plans: Inspect goods and ensure proper packaging to prevent damage during transit.
Central Insurance emphasizes the importance of tailored coverage for businesses in this industry. With over 145 years of experience, they provide expert guidance and support to help durable goods operations thrive. They focus not just on compliance but on creating a safe and efficient environment for employees and protecting valuable inventory.
For businesses in the durable goods sector, understanding and addressing these risks is essential for long-term success.