Understanding Insurance for Vendors

As a vendor, you are the pride and joy of your local farmers markets.  Your community looks forward to the products you deliver and trust in you. When you protect your operation with vendor liability insurance you protect your business. More important, you continue providing value to your community for years to come.

You may fear high insurance premiums that cut away at your bottom line, lawsuits can do far more damage. Vendor liability insurance protects you from claims that can arise from property damage, bodily injury, and foodborne illnesses.

Let’s take a look at the two most common types of insurance policies for food and craft market vendors.

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General Liability Insurance

General liability insurance protects against claims for bodily injury and property damage.

This is the first line of coverage a business owner or sole-proprietor purchases. Poorly set up booths or carelessly placed product is not only dangerous, but it can also be costly. General liability insurance protects your market from these and other claims.  Without it, you bear full financial responsibility.

Consider this example. Your local food and craft fair has opened for the season and you are ready to wow your community. You’ve carefully designed your booth, down to the smallest detail.  Guests begin to arrive and your set up is an instant success. While browsing, a woman trips over a beam from a part of your tent that has fallen and hits her head. She requires medical attention and is taken to the hospital. Are you insured to handle the claim that will likely follow?

You may be thinking, well the market has liability insurance.  Why do I need it as well? A market’s liability policy will only cover claims against the market premises. It will not cover the individual vendors and their installations.  This is where general liability insurance for vendors comes in. And in the same way, a market lists its landowner as an additional insured, you will list your market as one as well.  This ensures that you are covered in the event of an eligible claim.


Product Liability Insurance

Product liability insurance protects you from liability caused by the products or goods you sell.

This type of insurance protects you from financial loss due to legal and court costs in the event of a lawsuit related to your product. What if a customer alleges that the vegetables you sold her caused her to get sick with Salmonella? Serious civil charges could be brought against you and your business. This misfortune may end up draining the money and resources of your business, or worse personally.

Here are a few situations that are generally covered by product liability insurance:

  • Faulty packaging
  • Flammable products
  • Allergies caused by your product
  • Homemade products
  • Foodborne illnesses
  • Other illnesses and injuries related to your product

These are a few examples where a product liability insurance policy protects you from legal costs that could ruin your business.


What are the Consequences of Not Having Liability Insurance?

If you don’t have vendor insurance, you are in for trouble.

The consequences can be serious when you don’t have liability insurance. You personally become financially responsible for claims such as:

  • Injuries or death
  • Property damage
  • Product liability
  • General negligence
  • Cost of investigation for claims
  • Court costs and attorney’s fees

Don’t wait until it’s too late and an incident occurs. At that point, the claim will not be eligible to claim. Protect your business and reputation and invest in vendor liability insurance.


Choosing the Right Liability Insurance

Not all insurance companies are alike. Be careful not to choose the wrong liability insurance. This can be detrimental to your business and can hinder your potential to grow. These are the types of bad investments that can have serious ramifications in the future. Cover all your bases and choose insurance from the right provider.

Admitted Insurance. With admitted insurance, the state (where your policy is underwritten) backs your policy. State funds guarantee your policy pays out. Moreover, this applies even in the event your provider goes out of business.

Non-Admitted Insurance. States do not guarantee non-admitted insurance policies. If your provider goes out of business, claims against your business may not payout. In an instant and without notice, you can lose all your invested premiums.  You can also lose the ability to file eligible claims.

When choosing an insurance carrier, make sure you choose one offering admitted insurance.


Next Steps…

You and other producers and creatives are the lifeblood of a community’s farmers and craft markets You’re neighbors trust and count on your for locally sourced foods and handcrafted treasures. Insuring your farmers market vendor business will ensure continued success. For more than 30 years, Campbell Risk Management has offered policies for liability insurance in all 50 states. We offer the most comprehensive coverage on the market today. Get a free quote today or call us at (317) 848-9075.
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