When most people think about workers’ compensation insurance, they picture high-risk jobs, like HVAC work or working as an electrician. The truth is that every job carries its own risks, including wholesaling and retailing. If you operate a related business, you owe it to your employees and yourself to carry workers’ compensation for wholesalers and retailers.
Unsure why that’s the case? On the fence about the need in the first place? We’ll discuss everything you need to know below.
Before we dive into workers’ compensation for wholesalers and retailers, let’s explore both businesses in a little more depth.
Wholesaling is a process. These businesses can sell virtually anything, from gardening supplies to food. They operate across industry borders, too. Most wholesalers don’t work directly with the public. Instead, they supply retailers which then take those goods and sell them to customers. Of course, there are some notable differences – stores like Sam’s Club and Costco bring wholesale goods directly to consumers.
Typically, wholesalers bridge the gap between manufacturers and retailers. They’re the central part of the supply chain and help move and distribute goods more effectively. Here’s an example.
Suppose there’s a cell phone manufacturing company. It has all the equipment and technology necessary to manufacture phones in bulk, but it’s not particularly well-equipped for selling those phones in small batches. In this instance, the manufacturer would sell its products to a wholesaler, which in turn would take those large bulk orders and break them up for sale to multiple retailers across a region, or even across the nation.
Because wholesalers supply, move, and store products, employees of these businesses engage in activities that can easily lead to injuries, including heavy lifting, using heavy equipment like forklifts, working at height, repetitive motion, and more. Workers’ compensation insurance for wholesalers provides important protection and peace of mind for both employees and business owners.
Wholesale companies employ a wide range of individuals and many of them fall under class code 8018 (those who don’t fall under other classifications). Some of the common job roles in a wholesale operation include:
While wholesale workers might not face the same risks as a police officer or an electrician, they nevertheless face many threats every day on the job. Some of these include:
Retail businesses occupy the next step in the supply chain. They purchase from wholesalers and sell goods to consumers or other businesses. Retail stores can be found across most industries, from groceries to electronics, and everything in between. These businesses interact with suppliers, wholesalers, consumers, and many others.
Retail stores take many different shapes and forms. They run the gamut from the corner convenience store to that big-box department store downtown. They can be “mom and pop” shops or corporate-owned businesses that span the nation, too.
While retail stores might be the end of the supply chain, they can be a hive of activity. At any given time, consumers are walking through the store, employees are stocking items on shelves or racks, delivery drivers/suppliers are dropping orders on the dock or at the back door, and more. All this means there’s a significant chance of injuries and accidents.
Like wholesale operations, retail stores employ a wide range of people. These can include:
Like wholesale workers, those working in a retail store face a wide range of risks, including the following:
There’s a definite need for retail workers’ comp insurance, as you can see.
Retail and wholesale operations are related, but very dissimilar and have very different employment roles. However, retail workers’ compensation insurance and workers’ compensation for wholesalers work the same way. This type of insurance offers coverage in three different areas:
When an employee is injured on the job, you can expect there to be medical costs. This might include things like an ambulance ride to the hospital, emergency room costs, and more. However, those costs may not just be short-term.
Long-term costs can include medications, follow-up appointments, physical therapy to recover from the injury, and so forth. Workers’ comp insurance for retail and wholesale businesses covers all these costs.
Employees injured in workplace accidents don’t just incur medical bills. They also lose time on the job, which reduces their income and makes it impossible to meet their financial obligations.
Wholesale and retail store workers’ compensation insurance is designed to pay a percentage of the employee’s lost wages. The actual percentage varies depending on the state in question but averages around two-thirds.
Most states also require the employee to have missed a specific amount of time on the job before the insurance begins paying lost wages. This is usually between five and seven days.
If an employee dies due to a work-related accident, your workers’ compensation insurance pays death benefits to their survivors. These benefits come in several forms:
Determining the cost of workers’ compensation insurance for retailers and wholesalers is a tricky thing. It requires balancing quite a few factors, including your estimated payroll, number of employees, previous claims history, and much more. Job class codes also play a role.
Job codes are ways of designating risk levels associated with specific positions/roles. For instance, the 8018 workers’ comp code is for wholesale workers who aren’t covered by other codes. Correctly classifying your employees is essential – misclassification can lead to overpaying.
For business owners concerned about the costs of workers’ compensation for wholesalers and retailers, there’s good news. You can reduce your costs in several ways.
Managing costs is an important part of running a successful business. However, you want to reduce the cost of workers’ compensation insurance without sacrificing the protection your employees enjoy. Here are the simplest ways to do that.
Prioritize Safety – Make safety a big part of your corporate culture. Hold regular safety training events. Create a safety committee to help identify risks and threats within the workplace. Ensure that you’re following OSHA rules, too.
Focus on Prevention – Preventing accidents is always better than reacting to them. And with fewer claims, you’ll see lower rates. While there’s no way to guarantee that workers won’t be injured on the job, you can reduce the risk by:
Have a Return-to-Work Program – What happens when an employee is injured and out of work? If you simply wait for them to return to full capacity, you could be doing them a disservice and affecting your workers’ comp rates.
Instead, implement a return-to-work program that allows employees to come back at light duty. This helps speed overall recovery, reduces costs, and can even boost employee retention.
Finding workers’ compensation insurance isn’t as easy as you might expect. While you can usually purchase it from a standard insurance carrier, not all insurers offer this type of coverage. You may also find that some insurers won’t take a chance on you because of their underwriting guidelines.
If you’re stuck, Kickstand Insurance can help. We work with wholesalers and retailers to find the right coverage at the right price. Just take a few minutes to provide us with some basic information and we’ll give you an instant quote. Then one of our experts will take a deep dive to customize your coverage and reduce costs while ensuring your employees are protected.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.