Mail-Order Houses

How To Customize an Insurance Policy for Your Mail-Order House

Though the annual revenue generated by mail order houses is on the decline thanks in no small part to the popularity of online retailers, this industry is still going strong in the United States. Many people still do not feel comfortable with entering credit card information online, and they enjoy browsing through catalogs or watching product demonstrations on television. If you own a mail order business, you have likely invested a lot of capital into building up a solid inventory, so you will want to be certain to protect your investment by purchasing a solid mail order insurance policy portfolio.

2014 Mail Order Industry Facts From IBISWorld

  • There are more than 7,600 mail order houses operating in the United States.
  • These businesses employ nearly 210,000 people.
  • The mail order industry is responsible for about $125 billion in revenue each year.

Your Mail Order House Needs Sufficient Property Damage Coverage

As the owner of a mail order house, you likely have a large supply of goods stored in a warehouse. You will need to keep this inventory insured until the time of delivery to the recipients. To do this, you will need the appropriate insurance coverage.

Contents coverage provides you with compensation for loss or damage to property kept inside your warehouse. This includes your inventory as well as shelving, shipping supplies and other business property. Many commercial insurance policies will include certain mobile equipment such as forklifts in their contents coverage. If your insurer does not specifically include this coverage, your agent may be able to get coverage for the equipment on an exception basis. In this case, it will be necessary for your insurance agent to obtain a clarification endorsement stating that the equipment will be covered.

Because you remain responsible for coverage of your goods until your customers receive them, you may want to purchase transportation insurance, which is an aspect of inland marine insurance. This coverage, which is particularly beneficial if you deal in high value merchandise, provides compensation for loss or damage to your products from the time they leave your warehouse until the time they reach your customers.

Finally, if you own the warehouse itself, your commercial insurance policy will provide the option of building insurance, which covers damage to the structure of your building if the cause of the damage is among your policy’s covered perils. You will mostly likely be required by your lender to carry this type of insurance for as long as you have a mortgage.

Protect Your Mail Order Business From Liability Lawsuits

Liability lawsuits can be quite costly to your business, even if you are not found to have been negligent. This is because legal defense fees can often be quite expensive. Liability insurance provides compensation for court costs, legal fees and potential financial damages if your mail order business must defend itself against a liability charge. It is important, however, that you have coverage suitable for the various accountabilities you may face.

Because mail order houses do not have a retail space, the risk of members of the public suffering injuries while visiting your business is slim. However, premises liability can still help in the event that delivery people, service workers or visitors to your warehouse sustain injuries due to hazardous or poorly maintained spaces in your establishment.

Furthermore, although your business does not manufacture the products you are selling, if a product defect injures or sickens your customers, your business may be among those listed in a liability lawsuit. For coverage against this risk, you will need to carry product liability insurance.

Finally, a warehouse environment presents significant risks of employees getting hurt on the job. As their employer, you will be responsible for covering the cost of their medical treatment for these injures. This expense can be covered by workers' compensation insurance, which is required of employers in most states.

What Other Insurance Coverage Do You Need for Your Mail Order House?

There are other insurance types that you may want to add to your mail order insurance portfolio. These include the following:

  • Business Income Insurance: This coverage provides your mail order house with a continuation of income in the event that a major disaster forces you to halt operations at your warehouse while repairs are made. This coverage typically lasts until your business can resume normal operations, or after 12 months, whichever comes first.
  • Coverage against major disasters:  Business insurance policies nearly always have exclusions for damage caused by floods and earthquakes. Likewise, if your warehouse is located in an area that is at high risk for hurricane damage, this disaster may be excluded as well. There are policies and riders available that can supplement your coverage and protect your business from these risks. Your independent insurance agent can help you find and obtain them.
  • Health insurance:  The Affordable Care Act (ACA) requires businesses with at least 50 full-time employees to provide subsidized healthcare insurance to their employees. An independent insurance agent can help you find suitable health insurance at a competitive rate.
  • Employment Practices Liability Insurance: This liability insurance protects your business by covering the costs incurred if an employee sues your business for discrimination, sexual harassment, wrongful termination or any other illegal business practice.

There are several other types of available insurance, and some may be a good fit for your particular mail order business. An independent insurance agent can help you identify your exposures and can assist you with finding the appropriate insurance to protect your business from them.

Get Help Building a Solid Mail Order Insurance Policy

Purchasing business insurance for your mail order house does not need to a difficult process. When you work with an independent agent in the Trusted Choice® network, you will have access to a knowledgeable professional who can provide you with guidance as you make your coverage selections. These agents do not work for any particular insurance company, so they are free to shop around to build you a portfolio of coverage that is competitively priced and specifically built for your mail order house. Find a Trusted Choice agent near you to get more information about mail order insurance.


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