Products Liability – Wholesaler & Manufacturer Rep

Wholesaler, Distributor & Manufacturer Rep – How to protect your business from Products Liability

Distributors, Wholesalers, and Manufacturers’ representatives aren’t typically named in products liability suits, but when they are it can be disastrous. Most manufacturers’ representatives simply don’t have the financial wherewithal to defend themselves from costly lawsuits. Even though in most cases they’ll likely be dismissed from the lawsuit, legal fees can rapidly build up.

So as a manufacturer’s representative or distributor, are there steps you can take to minimize this exposure which can put your business at risk? Luckily there are, the experts at Kirkwood Insurance can help you protect what matters. You can contact our legal team to get specific details about risk transfer and protection but here’s some general advice:

  1. Incorporate your business
    1. You can protect your personal assets by incorporating your company, otherwise those personal assets could be at risk if you’re named in a lawsuit. LLCs or S Corps formations can provide you with advantageous tax treatment as well.
    2. If you package or handle your products before their final destination then you may want to consider creating an additional entity for these activities. This can protect assets you wouldn’t want to put at risk due to riskier nature of handling and working with the products you sell.


  1. Contractual Protection
    1. You should make it a point to have indemnification, hold harmless, and defense clauses in your contracts with your manufacturers. This will contractually obligate the manufacturer to defend you in lawsuits in which you’re a named party. If you don’t have these clauses in your contracts you could be left to defend yourself and incur costs which you have no viable way to pay. You should also request your manufacturers add you as an additional insured in a Broad Form Vendor Endorsement. This is another layer of protection for your business.



  1. Insurance Protection
    1. If you can’t get indemnification and additional insured provisions included in your contract then you may have to consider obtaining your own products liability coverage. This will directly provide defense and indemnification for any products related claims. The experts at Kirkwood Insurance can help you find affordable coverage for your business and livelihood.


  1. Individual Responsibility
    1. Being responsibility when making claims about your products is one of the best protections you can provide your business. Make sure you don’t make representations about a product that you can’t back up with information from the manufacturer or other published data.


These are just a few of the steps you can take to protect what matters, contact us today!