Due to the nature of their business, vendors have an incredible amount of contact with the general public. Since there is such close contact, it is necessary that they protect themselves with a sufficient amount of vendor insurance coverage. This type of insurance offers a layer of protection that goes beyond general liability insurance. Keep reading to learn more about vendor liability insurance and why it is a wise decision for vendors to make in terms of risk management.
The purpose of vendor insurance
Vendor insurance is meant to protect the holder against lawsuits from third parties stemming from personal injury or property damage.
The ability to do business
One important reason for vendors to carry specific vendor’s liability insurance is that it opens up more business opportunities. Many farmers’ markets, ballparks, music arenas, and other venues where vendors are common fixtures require their vendors to carry insurance policies. Whether it’s food vendor liability insurance or another policy, simply having vendor insurance allows vendors to have additional job opportunities, which results in the ability for them to make more money.
Vendor liability issues
Believe it or not, vendors are open to a significant amount of liability. Vendors can sell anything from small souvenir trinkets to scrumptious foods. Different items carry different amounts of risk of a potential lawsuit. For example, a vendor who sells plastic trinkets has less liability than a vendor who owns a food truck that requires a heating source that can cause burns. Similarly, the location of the vendor’s selling space is also a consideration. A vendor in a fixed location most likely has less potential for liability than a vendor with a moving cart that can strike someone and cause an injury. Regardless of the level of liability, every vendor is susceptible to some type of it. Vendor insurance can protect policyholders from the financial losses that can accompany a lawsuit.
What does vendor insurance cover?
Vendor insurance provides comprehensive coverage for policyholders. It protects against property damage liability, advertising injury liability, bodily injury liability, personal injury liability, and litigation coverage. Some examples of how an investment in vendor insurance can help include:
- Accidents can happen at any time. Vendor insurance gives the policyholder peace of mind that an accident will not result in financial devastation.
- Damage to property can happen quickly and without warning. If your vending cart is damaged or if it damages someone else’s property, vendor insurance will cover the cost of the damage.
- Litigation coverage pays for all settlement and court costs that are incurred by the policyholder in the event of a lawsuit.
Product liability issues
Vendors must always be aware of potential liability that can be caused by their products. This issue is particularly important to vendors who sell food to customers. Food products always have the possibility of being contaminated with unhealthy bacteria or other contaminants that are harmful if they are consumed. It is usually impossible to see these issues with the naked eye. A consumer who falls ill due to contaminated food that was purchased from a vendor can become a terrible problem for the vendor. Medical bills from foodborne illness can be incredibly expensive, and it could be the vendor’s responsibility to cover them. But, when there is vendor insurance in place, it can save the vendor from financial devastation.
A popular barbecue restaurant had a booth at the local county fair. Their fare consisted of the usual barbecue dishes such as hot wings, ribs, and tri-tip. The food was prepared on both open fire and propane gas grills. One evening during the fest, one of the propane tanks exploded hot food and metal sprayed into the nearby crowd of people. Eight people were injured. Both the event holder and the vendor were named defendants in a class action lawsuit. The vendor was required to pay almost $700,000 in damages. That is a lot of money, even for a successful restaurant chain. Thankfully, the restaurant had a vendor insurance policy and was able to make a claim to cover the cost.
Vendors need to have job-specific insurance as a means of financial protection. There are too many potential pitfalls that can cause long-term financial ruin from which they need to safeguard themselves.