Important Coverage Provisions

Product Liability

Manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause.  Product liability insurance protects businesses in the event that the products they have manufactured or sold injure someone or cause property damage.

Product liability insurance is typically purchased in increments of $1,000,000.  The policy may also include a deductible or retention.  This represents the "out of pocket" cost that the policy holder will incur for a claim.

product recall

Product recall insurance is a unique policy that reimburses policy holders for financials losses they confront because of evidence indicating a product has caused or would cause bodily injury or property damage.  Coverage would be "triggered" for a nutraceutical company when knowledge is gained that an accidentally or maliciously contaminated product would cause bodily injury were it consumed by the public.  Even if the product results in no liability, the policy holder is reimbursed for certain financial costs related to the incident.

Cyber Liability

Cyber liability insurance protects a policy holder against 1st and 3rd party damages sustained as a result of an actual or alleged breach of private information held by the policy holder.  The breached information may belong to clients, employees, suppliers, or vendors.

First party damages may include cyber extortion costs, data restoration costs, network restoration costs, loss of profits and extra expense (business interruption), forensic investigation costs, public relation costs, notification costs, credit monitoring costs.

Third party damages may include legal defense, settlements for damages and judgments related to the breach, liability to banks for re-issuing credit cards, and regulatory fines and penalties.

directors & officers liability

Directors & Officers insurance protects company executives from claims which may arise from the decisions and actions taken within the scope of their regular duties.  Given that the personal assets of these company executives are at risk, directors & officers insurance should be a standard component of every company's insurance portfolio.

While directors & officers insurance was originally intended to protect company executives, most policies today cover managers, other non-executive directors, employees, and the company itself.

Claims can be brought by company stakeholders, customers, customer groups, competitors, business partners, and government enforcement/regulatory groups.

employment practices liability

Employment practices liability insurance protects a company, its executives, and its employees, from claims alleging a violation of legal rights by an employee.  The most common employment practices liability insurance claims involve the following: sexual harassment, discrimination, wrongful termination, failure to hire or promote, retaliation, breach of employment contract, negligent evaluation, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress, and wage and hour disputes.

Employment practices liability insurance will pay for defense costs and settlement costs associated with a claim.

All employers, large or small, are at risk for these types of claims.

international insurance

Nutritional and Dietary Supplement companies often have international insurance exposures.  These exposures are a result of overseas manufacturing, international travel, global product distribution, and international subsidiary creation.  Insuring these exposures adequately can be a daunting task.  Navigating through international insurance requirements, policy restrictions, and local country insurance agents requires expertise and experience.

Areas of international exposure include: internationally owned property, international local operations, international travel, international auto ownership or rental, and international products distribution.

general liability insurance

General Liability Insurance protects nutraceutical companies from 3rd party bodily injury or property damage claims unrelated to their products.  The majority of nutritional supplement, dietary supplement, and vitamin companies are protected from product claims through a separately purchased product liability policy (top of page).

The most common claims reported involve the premise or operations of the policyholder..  An example would be a 3rd party entering your premise and slipping on an unmarked wet floor and injuring themselves.  General Liability Insurance would pay for the medical bills associated with the bodily injury they sustained.  Other aspects of General Liability Insurance include Personal Injury Liability, Medical Expenses, and Fire Legal Liability.

commercial property insurance

A Commercial Property Insurance policy protects the assets and income of a company from covered causes of loss.  A typical commercial property insurance policy will insure buildings and structures, contents and inventory (business personal property), business income and extra expense (business interruption), and equipment breakdown.

Most policies are written on a "Special Form" policy.  This type of policy defines what is covered and agrees to insure it against all perils except those otherwise excluded or sub-limited.  The most common exclusions are ordinance and law, earthquake, flood, governmental action, nuclear hazard, utility services, war and military action, and fungus.

workers compensation

Workers Compensation Insurance provides benefits to employees for injuries and illnesses arising out of and in the course and scope of their employment.  These benefits include medical expense payment, lost wages, and indemnification for permanent  bodily injuries or death.  

Workers Compensation Insurance is legally required and can be purchased through private insurance companies in every state except North Dakota, Ohio, Washington, and Wyoming.

Workers Compensation Insurance also includes Employers Liability coverage.  Employers Liability covers liability arising out of employees' work related injuries that do not fall under the workers compensation statute (Example: Loss of Consortium claims or Third Party Action Over claims)

commercial auto insurance

Nutraceutical companies that own vehicles need to purchase Commercial Auto Insurance.  Commercial Auto Insurance insures the vehicles for physical damage claims and protects the company from liability losses that may arise out of the use of a corporately owned vehicle.  Commercial Auto Insurance policies should also include "Hired and Non-Owned Auto" coverage.  This coverage insures losses arising out of the use of a rental car (rented by the company) or a personally owned auto by an employee for business purposes.

ocean marine (cargo) insurance

Many nutritional supplement and dietary supplement companies ship products to or from other countries.  This may involve shipments from other countries arriving at a domestic warehouse or distribution center or shipments to other countries for sale or distribution.  In either case, Ocean Marine Insurance covers the transportation of goods and/or merchandise by vessels crossing both foreign and domestic waters including any inland or aviation transit associated with the shipment.

Fiduciary liability & fidelity Insurance

Fiduciary Liability - In today's ever-shifting legal environment, employers are increasingly being held accountable for the benefit options they offer employees.  Under ERISA, fiduciaries can be held personally liable for losses to a benefit plan incurred as a result of their alleged errors and omission or breach of their fiduciary duty.  The company, fiduciaries of employee benefit plans, and benefit plan administrative employees are insured under this policy.

Fidelity Insurance - Also called a fidelity "bond" or "crime" insurance, this type of insurance insures against theft of company funds.  The theft may be committed by an employee or by a 3rd party through a variety of means.  Theft via fraudulent fund transfers, fraudulent credit card usage, and computer systems is becoming more and more common.

trade credit insurance

Trade Credit Insurance is an insurance policy and risk management product that protects a company's accounts receivable from loss due to credit risks such as protracted default, insolvency, or bankruptcy of debtors.  This insurance usually covers a portfolio of buyers and pays an agreed percentage of an invoice or receivable that remains unpaid as a result of protracted default, insolvency, or bankruptcy of a debtor.