7 Insurance Policies for Equipment Distributors

Investing in the right insurance protection isn’t just smart—it’s essential to keeping your operations running smoothly and your financial health secure.

Read this article with helpful information provided by Deidra Hoschak, senior small business underwriter at Central Insurance, to learn what policies are most critical to equipment distributors outside the food and beverage industry, and how to protect your business from potential liabilities.

Equipment distributors are critical in connecting industries with the tools and machinery they need to operate. Whether your business distributes electrical gear, heavy equipment, or niche industrial tools, you may face unique risks—from transportation damage and theft to fire loss and liability claims. 

Why Equipment Distributors Need Comprehensive Insurance

Day-to-day operations in equipment distribution organizations come with a variety of exposures. Fire risks from the equipment, theft of valuable inventory, and auto-related incidents from deliveries or pickups are just a few examples. 

Below, we break down several essential insurance policies your equipment distribution business should consider

1. General Liability for Equipment Distributors: A Critical Foundation

General liability insurance can help protect your business against third-party claims for bodily injury, property damage, and personal injury. A comprehensive liability policy is especially important for distributors dealing with multiple vendors and customers. 

According to Hoschak, vendors may have varying insurance requirements—some could require an umbrella policy of $1 million, while others may expect $5 million in coverage. 

Keep in Mind: Working with an insurance agent who understands the nuances of vendor relationships helps ensure you’re covered, for many of your client’s demands.

2. Business Owner’s Policy (BOP) for Equipment Distributors: Streamlined Protection for Small Businesses

Many small to mid-size equipment distributors may benefit from a Business Owner’s Policy (BOP), which conveniently bundles property and liability coverage into one package. 

“A BOP is geared toward smaller operations and includes much of what they need, without a lot of fluff,” Hoschak states. 

It typically includes commercial property coverage to protect your building (if you own it), equipment, and inventory, as well as liability coverage for defense costs and damages from covered third-party claims. Optional endorsements, such as business income or cyber liability, can also be added based on your specific needs.

3. Property Insurance for Equipment Distributors: Protecting Your Physical Assets

Commercial property insurance is essential for businesses with physical locations or significant inventory. Events like fires, severe weather, or theft can lead to devastating losses. “Without proper coverage, just one incident could jeopardize your entire operation,” Hoschak explains. “Having insurance in place provides critical financial security when unexpected losses occur.”

Equipment distributors should invest in commercial property insurance to protect the value of their assets. This kind of policy may include:

• Building coverage if you own your premises or are required to insure it
• Business personal property coverage for office equipment, shelving, and inventory
• Peak season endorsements if your inventory fluctuates throughout the year

4. Inland Marine Insurance for Equipment Distributors: For Equipment Goods in Transit

Many distributors like you are responsible for the product while it’s in motion, as well. This is where inland marine coverage comes in. 

“Inland Marine insurance is also often called a ‘floater’ because it can provide coverage for your property as it moves between locations,” Hoschak says. If your business relies on shipping or transferring goods, this policy can fill the gap between point A and point B.

In addition to providing coverage for goods in motion, inland marine insurance is a great choice for insuring equipment that doesn’t stay fixed to one location, like forklifts or mobile tools. 

“Often, forklifts are insured as inland marine,” Hoschak notes, “because if they leave the premises—even across the road—they may no longer be covered under standard property policies.” 

This flexible protection helps close coverage gaps and provides financial security for valuable equipment wherever it’s used.

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5. Commercial Auto for Equipment Distributors: Defending Against Risks

If your equipment distribution business utilizes vehicles for deliveries, pickups, or even warehouse transfers, you’ll also need to invest in commercial auto coverage. 

“If you own the vehicles, you need a commercial auto policy. If you’re leasing or hiring vehicles, then you need hired and non-owned coverage,” Hoschak explains.

A commercial auto policy can cover:

• Liability for accidents caused by your business vehicles
• Physical damage to your vehicles
• Your tools or equipment damaged while in transit

6. Workers’ Compensation for Equipment Distributors: Protecting Your Workforce

Distributors with warehouse or delivery staff face substantial potential for injuries, from lifting injuries to forklift accidents. 

“You can put every protocol in place, but you can’t always ensure people follow it,” Hoschak explains. 

In order to protect your business from these potential incidents, Hoschak recommends investing in Workers’ Compensation, a policy that is also legally required in many states. 

In the face of a workplace injury, this policy can cover:

• Medical expenses
• Lost wages
• Rehabilitation costs

More importantly, Workers’ Compensation helps businesses maintain operations without absorbing the full cost of an on-the-job injury.

Central offers a nurse hotline that provides telephonic nurse triage and a system through which to submit a claim within minutes of an accident. As a result, injured workers can be immediately directed to the appropriate medical facility and receive proper treatment without waiting for paperwork or approvals to be filed.

7. Umbrella Insurance for Equipment Distributors: An Added Layer of Protection

For businesses with higher liability exposure—especially those transporting expensive customer equipment or operating in litigious markets—commercial umbrella insurance adds an extra layer of financial protection above existing policy limits. It ensures a single lawsuit doesn’t put your business at risk.

“Umbrella coverage can kick in after your general liability and auto policies max out,” Hoschak states. 

What’s more, for equipment distributors who may have trucks on the road or employees at customer locations, she notes that this additional coverage can make a big difference in protecting your bottom line. It’s a cost-effective way to extend coverage across multiple policies and provide peace of mind in unpredictable situations.

The Central Difference

Choosing the right insurance partner matters. 

“Our claims service is second to none,” Hoschak emphasizes. “And our products aren’t bare bones—we start by offering base coverage you might need, and then tailor it based on your actual exposures.”

With nearly 150  years of experience and a carefully selected network of agent partners, Central brings trusted guidance, responsive claims support, and comprehensive policy options tailored to the risks of equipment distributors. We work directly with businesses to identify exposures before they become costly issues. Plus, our emphasis on long-term relationships means you’re supported not just at the start of your policy, but through every stage of your business’s growth.Contact your local, independent Central agent today for more information about how Central Insurance can protect your equipment distribution company.Equipment distributors are critical in connecting industries with the tools and machinery they need to operate. Whether your business distributes electrical gear, heavy equipment, or niche industrial tools, you may face unique risks—from transportation damage and theft to fire loss and liability claims. 

Investing in the right insurance protection isn’t just smart—it’s essential to keeping your operations running smoothly and your financial health secure.

Read this article with helpful information provided by Deidra Hoschak, senior small business underwriter at Central Insurance, to learn what policies are most critical to equipment distributors outside the food and beverage industry, and how to protect your business from potential liabilities.