• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Exclusives
    • Nutraceuticals
    • Markets
    • Health
    • Jobs
    • Events
    • Buyers' Guide
    • Showcases
    • More
  • Magazine
  • News
  • Exclusives
  • Nutraceuticals
  • Markets
  • Health
  • Jobs
  • Events
  • Buyers' Guide
  • Showcases
  • Current & Past Issues
    Features
    Columns
    Editorials
    Digital Edition
    Subscribe Now
    Advertise Now
    eNewsletter
    Editorial Guidelines
    Top Features
    Researchers Develop New Global Estimate of Medicinal Plant Species and Conservation Status

    All Eyes on Vision Health

    Health Benefits of Vitamin K: A Contemporary Cornerstone of Heart and Bone Health

    Vitamin D: A Fixture of Supplementation and Fortification

    Magnesium: An Essential Mineral with Many Forms and Functions
    Breaking News
    Certifications, Approvals and Patents
    Exclusives
    Industry & Market News
    People
    Products
    Regulatory
    Glossary
    Research
    Supplier News
    Supplier Insights
    Live From Shows
    Top News
    Pycnogenol Supplementation Linked to Hair Density in Menopausal Women

    BAPP Paper Reviews Common Adulteration Practices Which Go Undetected

    CRN Announces Promotions and Welcomes New Staff Member

    Quercetin Ingredient Linked to Improved COVID-19 Recovery: Study

    Dr. Ranjini Murthy Joins Azelis Americas as SVP of Commercial and Digital Excellence
    Exclusives
    Blogs & Guest Articles
    Health E-Insights
    Area Code 420
    eBook
    Antioxidants
    Dairy-Based Ingredients
    Enzymes
    Fatty Acids
    Fiber & Carbohydrates
    Green Foods
    Herbs & Botanicals
    Marine Nutraceuticals
    Minerals
    Omega 3s
    Probiotics & Prebiotics
    Proteins, Peptides, Amino Acids
    Sweeteners
    Vitamins

    Pycnogenol Supplementation Linked to Hair Density in Menopausal Women

    BAPP Paper Reviews Common Adulteration Practices Which Go Undetected

    CBD Expectations: What Happens at FDA and Congress After Agency Seeks New Regulatory Pathway?

    Quercetin Ingredient Linked to Improved COVID-19 Recovery: Study

    Pomegranate Extract Tied to Gut and Skin Microbiome Benefits
    Consumer Trends
    Contract Manufacturing
    Cosmeceuticals / Nutricosmetics
    Delivery & Dosage Technologies
    Dietary Supplements
    Flavors & Colors
    Functional Foods & Beverages
    Healthcare Trends
    Medical Nutrition
    Mergers & Acquisitions
    Natural/Organic
    Nutrition Bars
    Packaging
    Pet Nutraceuticals
    Quality & Safety
    Regulations
    Research
    Testing
    World Markets

    Pycnogenol Supplementation Linked to Hair Density in Menopausal Women

    BAPP Paper Reviews Common Adulteration Practices Which Go Undetected

    CBD Expectations: What Happens at FDA and Congress After Agency Seeks New Regulatory Pathway?

    Quercetin Ingredient Linked to Improved COVID-19 Recovery: Study

    Pomegranate Extract Tied to Gut and Skin Microbiome Benefits
    Bone & Joint Health
    Cancer Risk
    Cardiovascular Health
    Cognitive Function
    Diabetes & Blood Sugar Management
    Digestive Health
    Energy
    Eye Health
    Healthy Aging
    Immune Function
    Infant & Children's Health
    Inflammation
    Men's Health
    Mood Health & Sleep
    Oral Health
    Sexual & Reproductive Health
    Skin Health
    Sports Nutrition
    Weight Management/Weight Loss
    Women's Health

    Pycnogenol Supplementation Linked to Hair Density in Menopausal Women

    Quercetin Ingredient Linked to Improved COVID-19 Recovery: Study

    Pomegranate Extract Tied to Gut and Skin Microbiome Benefits

    Probiotics Supplementation Reduces Complications in Colorectal Cancer Patients

    Vitamin D Supplementation Reduces Risk of Dynapenia
    Industry Events
    Live From Show Events
    Webinars
    All Companies
    Categories
    Trade Associations
    Company Capabilities
    International Buyers Guide Companies
    JRS Pharma

    Nutrition21, LLC

    EIRICH Machines

    Verdure Sciences

    Xsto Solutions
    Companies
    Product Releases
    News Releases
    Literature / Brochures
    White Papers
    Jobs
    VIdeos
    Services
    Add New Company
    International Buyers Guide Companies
    JRS Pharma

    Nutrition21, LLC

    EIRICH Machines

    Verdure Sciences

    Xsto Solutions
    • Magazine
      • Current / Back Issue
      • Features
      • Editorial
      • Columns
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Buyers' Guide
      • All Companies
      • Categories
      • Trade Associations
      • Company Capabilities
    • Nutraceuticals
      • Antioxidants
      • Dairy-Based Ingredients
      • Enzymes
      • Fatty Acids
      • Fiber & Carbohydrates
      • Green Foods
      • Herbs & Botanicals
      • Marine Nutraceuticals
      • Minerals
      • Omega 3s
      • Probiotics & Prebiotics
      • Proteins, Peptides, Amino Acids
      • Sweeteners
      • Vitamins
    • Markets
      • Consumer Trends
      • Contract Manufacturing
      • Cosmeceuticals / Nutricosmetics
      • Delivery & Dosage Technologies
      • Dietary Supplements
      • Flavors & Colors
      • Functional Foods & Beverages
      • Healthcare Trends
      • Medical Nutrition
      • Mergers & Acquisitions
      • Natural/Organic
      • Nutrition Bars
      • Packaging
      • Pet Nutraceuticals
      • Quality & Safety
      • Regulations
      • Research
      • Testing
      • World Markets
    • Health
      • Bone & Joint Health
      • Cancer Risk
      • Cardiovascular Health
      • Cognitive Function
      • Diabetes & Blood Sugar Management
      • Digestive Health
      • Energy
      • Eye Health
      • Healthy Aging
      • Immune Function
      • Infant & Children's Health
      • Inflammation
      • Men's Health
      • Mood Health & Sleep
      • Oral Health
      • Sexual & Reproductive Health
      • Skin Health
      • Sports Nutrition
      • Weight Management/Weight Loss
      • Women's Health
    • Online Exclusives
    • Webinars
    • Slideshows
    • Blogs & Guest Articles
    • Health E-Insights
    • Videos
    • Podcasts
    • Infographics
    • eBook
    • Whitepapers
    • Research
      • TrendSense
      • Monograph Center
      • White Papers
      • Research News
    • Jobs
    • Events
      • Industry Events
      • Live From Show Events
      • Webinars
    • Supplier Showcases
      • Companies
      • Product Releases
      • News Releases
      • Literature / Brochures
      • White Papers
      • Jobs
      • VIdeos
      • Services
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Columns

    Big Retail’s Trend Toward Higher Product Liability Insurance Requirements

    Supplement companies struggle with higher premium costs to satisfy the giants of retail.

    Big Retail’s Trend Toward Higher Product Liability Insurance Requirements
    Related CONTENT
    • In Memoriam: Dick Griffin
    • Insurance Complications for Supplement Sellers on Amazon
    • Insurance Rates Have Been at an All-Time Low, But a Hard Market is Coming
    • GNC Spotlight: Experience & Innovation Drive the Future of Retail
    • Testing Strategies in the Modern Nutraceuticals Industry
    By Greg Doherty, Bolton & Company10.02.17
    During the 16 years I have been running a dietary supplement insurance practice, large retail chains have almost always asked their suppliers for product liability limits that are higher than a “standard” product liability policy of $2 million. Back in the 2000s and the early part of the second decade of this century, the price difference between buying a standard policy ($2 million) and a higher limit of, for example, $5 million, was substantial—and for some, was the tipping point for companies getting into a Big Box Chain or not.

    In 2017, things have changed. Product liability rates for dietary supplements have fallen dramatically since the bad old days of ephedra hysteria, and that’s a good thing for the suppliers of supplements and similar products, such as cosmetics, the latter which generally suffer from high liability insurance rates right along with supplements.

    Offsetting this good news about rates is the higher insurance requirements Big Box Chains are demanding for product liability insurance. Why is this happening? I have two theories that I think work in tandem to drive this trend.

    First, big companies think all of their suppliers should buy as much insurance as they do. This is not logical thinking, but I believe it exists. It’s a corporate mindset. True, big companies buy lots of liability insurance because they are big targets for plaintiff’s attorneys, and because they have a lot to protect. They also have shareholders who expect them to buy adequate insurance to cover catastrophic risks (and thus protect profits from uninsured losses). But this does not necessarily translate into a requirement to have a supplier with $5 million a year in revenue to have $20 million of liability insurance.

    Second, some of the Big Box Chains have been stuck with large financial losses due to the products of suppliers, and those suppliers did not have adequate insurance to cover the loss, leaving the Big Box store holding the bag. There are many examples of this; the most recent being the lawsuits against Amazon for alleged faulty solar eclipse glasses that came from China and were sold on Amazon by some very small, opportunistic suppliers.

    Enforcement of Insurance Requirements
    It’s one thing to have requirements for liability insurance to be a supplier to a Big Box Chain. It’s another thing to enforce them. For if you do not enforce them, it’s the same as not having them at all. Similarly, if you enforce them on a seemingly arbitrary basis, that creates questions of a double standard or possibly favoritism among suppliers. And there is plenty of this behavior going on for dietary supplement suppliers.

    For example, Amazon has a requirement for $1 million of liability insurance for supplements and, to the best of my knowledge, for all products sold by all suppliers to Amazon. It is widely known among the Amazon supplement sellers and resellers that there is no enforcement of this requirement by Amazon. We can testify to that as we have scores of customers selling on Amazon. We never receive correspondence from Amazon asking for documentation of our customers’ liability insurance.

    What this also means is that there are probably tens of thousands of Amazon sellers operating without any liability insurance whatsoever. In addition, Whole Foods Market, recently acquired by Amazon, has a $7 million insurance requirement for supplements and vigorously enforces the requirement. Will Amazon’s requirements be adjusted to be closer to Whole Foods, or vice versa? Stay tuned.

    Walgreens and Walmart both require $20 million of liability insurance for supplements. However, it is not a well-kept secret that these requirements are arbitrarily enforced by both companies, or so it would seem. Some companies selling supplements to these firms have been getting away with $5 million or $10 million of insurance for years. Others, most recently a small client ($10 million revenue), eager to get into Walmart, was pushed into buying the $20 million limit before they could get final approval. Is this fair to those companies forced to comply with published requirements, while others are openly non-compliant?

    Trends for 2017 and a Solution
    There’s little doubt that the Big Box Chains will elevate their liability insurance requirements over time. If nothing else, inflation will guarantee that. Already, as pointed out in this article, the process of setting minimum requirements for insurance can be arbitrary and, for small companies, downright punitive, in terms of costs to comply.

    Recognizing this problem, our Dietary Supplement Insurance Practice recently created an exclusive facility to help companies, large and small, to comply with insurance requirements of $20 million (Walmart and Walgreens) and other Big Box Chains that have a high requirement for supplements (e.g., $10 million). Our first customer to use this facility saved 33% on its premium versus an “open market” premium, which we had priced just before creating this facility. So yes, there are solutions to the cost parameter. But the process of marching to the drum of the Big Box Chains can still be a headache-inducing experience.


    Greg Doherty
    Bolton & Company

    Greg Doherty is a commercial insurance broker with Bolton & Company Insurance Brokers and Employee Benefits Consultants, Pasadena, CA. He is the executive vice president and managing director of the Dietary Supplement Practice Group for the firm, which specializes in the nutritional product and dietary supplement industries, including but not limited to contract manufacturers, raw materials suppliers, distributors/retailers. Mr. Doherty has four decades of experience as a broker, focusing solely on the dietary supplement industry for the last 14 years. He can be reached at gdoherty@boltonco.com; Phone: 626-535-1409; Website: www.gregdoherty.net.
    Related Searches
    • Dietary Supplement
    • Nutritional
    • China
    • Whole Foods
    Related Knowledge Center
    • Regulations
    • Quality & Safety
    • Dietary Supplements
    Suggested For You
    In Memoriam: Dick Griffin In Memoriam: Dick Griffin
    Insurance Complications for Supplement Sellers on Amazon Insurance Complications for Supplement Sellers on Amazon
    Insurance Rates Have Been at an All-Time Low, But a Hard Market is Coming Insurance Rates Have Been at an All-Time Low, But a Hard Market is Coming
    GNC Spotlight: Experience & Innovation Drive the Future of Retail GNC Spotlight: Experience & Innovation Drive the Future of Retail
    Testing Strategies in the  Modern Nutraceuticals Industry Testing Strategies in the Modern Nutraceuticals Industry
    Key Speakers for CRN Conference Announced Key Speakers for CRN Conference Announced
    Beauty Takes Center Stage with Healthy Living Beauty Takes Center Stage with Healthy Living
    Closing of Amazon and Whole Foods Market Acquisition Brings Perks for Consumers Closing of Amazon and Whole Foods Market Acquisition Brings Perks for Consumers
    Representative Mia Love to Co-Chair Congressional Dietary Supplement Caucus Representative Mia Love to Co-Chair Congressional Dietary Supplement Caucus
    What Could Amazon’s Acquisition of Whole Foods Mean for the Natural Products Industry? What Could Amazon’s Acquisition of Whole Foods Mean for the Natural Products Industry?
    Online Sales of Vitamins, Minerals, Supplements Surge 20% in $13.5 Billion U.S. Market Online Sales of Vitamins, Minerals, Supplements Surge 20% in $13.5 Billion U.S. Market
    How Trust  Sells Dietary Supplements How Trust Sells Dietary Supplements
    Product Liability Insurance  Challenges Remain in  Sports Nutrition Product Liability Insurance Challenges Remain in Sports Nutrition
    Now, More Than Ever,  Quality Counts! Now, More Than Ever, Quality Counts!
    Building Trust in Dietary Supplement Brands Building Trust in Dietary Supplement Brands

    Related Breaking News

    • Breaking News | People News | Regulations | World Markets
      In Memoriam: Dick Griffin

      In Memoriam: Dick Griffin

      The industry veteran who provided insurance services to several trade organizations passed away on December 29.
      01.06.22

    • Dietary Supplements | Herbs & Botanicals | Regulations
      Insurance Complications for Supplement Sellers on Amazon

      Insurance Complications for Supplement Sellers on Amazon

      It’s critical to review policy language details, and not let short-term savings leave your business at risk.
      By Chris Morey, Associate Vice President at Bolton & Company 10.08.21

    • Dietary Supplements | Regulations
      Insurance Rates Have Been at an All-Time Low, But a Hard Market is Coming

      Insurance Rates Have Been at an All-Time Low, But a Hard Market is Coming

      Companies can be prepared by being thorough and transparent while going through insurance policy renewals.
      By Chris Morey, Bolton & Company 12.04.20


    • Consumer Trends | Dietary Supplements | Healthcare Trends | Quality & Safety
      GNC Spotlight: Experience & Innovation Drive the Future of Retail

      GNC Spotlight: Experience & Innovation Drive the Future of Retail

      With a new CEO, the company remains focused on inspiring consumers around the world to live well.
      By Sean Moloughney, Editor 10.02.17

    • Dietary Supplements | Herbs & Botanicals | Quality & Safety | Regulations | Testing
      Testing Strategies in the  Modern Nutraceuticals Industry

      Testing Strategies in the Modern Nutraceuticals Industry

      Trusted analytical methods validate product quality and integrity.
      By Sean Moloughney, Editor 09.07.17

    Loading, Please Wait..
    Trending
    • Vitamin D Supplementation Reduces Risk Of Dynapenia
    • NOW Switches To Bottles Made From 100% Post-Consumer Recycled Resin
    • Shiitake Mushroom Extract Appears Helpful In HPV Infections
    • CBD Expectations: What Happens At FDA And Congress After Agency Seeks New Framework?
    Breaking News
    • Pycnogenol Supplementation Linked to Hair Density in Menopausal Women
    • BAPP Paper Reviews Common Adulteration Practices Which Go Undetected
    • CRN Announces Promotions and Welcomes New Staff Member
    • Quercetin Ingredient Linked to Improved COVID-19 Recovery: Study
    • Dr. Ranjini Murthy Joins Azelis Americas as SVP of Commercial and Digital Excellence
    View Breaking News >
    CURRENT ISSUE

    Jan/Feb 2023

    • Healthy, Clean Label Snacks and Nutrition Bars Help Fill Nutrient Gap Cleaved By Modern Lifestyles
    • Magnesium: An Essential Mineral with Many Forms and Functions
    • Vitamin D: A Fixture of Supplementation and Fortification
    • Health Benefits of Vitamin K: A Contemporary Cornerstone of Heart and Bone Health
    • All Eyes on Vision Health
    • Researchers Develop New Global Estimate of Medicinal Plant Species and Conservation Status
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    Pycnogenol Supplementation Linked to Hair Density in Menopausal Women
    BAPP Paper Reviews Common Adulteration Practices Which Go Undetected
    CRN Announces Promotions and Welcomes New Staff Member
    Coatings World

    Latest Breaking News From Coatings World

    ROSS Offers Heavy-Duty Three Roll Mills for High Viscosity Dispersions
    PPG Achieves ISO 14001 Certification of Environmental Management System
    AmCoat’s Rhino Shield and Floor Shield Break Records in 2022
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    Japanese Universities Start Joint Trials for Fall Detection Tech
    FDA Clears H2o Therapeutics' Parkinson's Disease Monitoring App
    MICRO's Costa Rica Facility Achieves ISO 13485:2016 Certification
    Contract Pharma

    Latest Breaking News From Contract Pharma

    HPNE Launches New Approach to Single-Use Assembly Production
    Andelyn Biosciences, Odylia Therapeutics Partner to Manufacture Gene Therapy for Vision Loss
    Lonza Breaks Ground on Commercial Drug Product Facility in Stein
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Paco Rabanne Launches FAME Fragrance in the U.S.
    Sally Beauty Expands Bondbar Lineup of Hair Care Products
    L’Oréal Group Recognized by Bloomberg Gender-Equality Index 2023
    Happi

    Latest Breaking News From Happi

    Ross Introduces Heavy-Duty Three Roll Mills for High-Viscosity Dispersions
    Perfect Corp Partners with Beekman 1802 for New My Skin Biome Tool
    OPI’s Nature Strong Introduces Botanical Base Coat and New Colors
    Ink World

    Latest Breaking News From Ink World

    C3Nano Offers New SuperGrid Flexible Low-Temperature Ink
    ROSS Develops Heavy-Duty Three Roll Mills for High Viscosity Dispersions
    Alexander's Adds Two New HP Indigo 100K Digital Presses to Fleet
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Baker Labels invests in Digicon 3000 for flexible packaging division
    PIM promotes Kristin Pilling-Davis to executive director
    Stratus Packaging embraces automation with Bobst
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    WPT Nonwovens to Add Thermobonding Line in Kentucky
    Superior Felt & Filtration Adds Domestic Injection Molding to its Medical Filtration Capabilities
    Ahlstrom Launches New Generation FluoroFree Technology
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Solid Growth Ahead for Orthopedic Power Tools Market
    Mobi-C Cervical Disc Replacement Procedures Top 200,000
    OPUM, Corflex Global Partner on Knee Assessment Technology
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    Alexander Everke Hands Over ams OSRAM CEO Position to Aldo Kamper
    Angèle Reinders Named New Director of Solliance
    C3Nano Launches New SuperGrid Flexible Low-Temperature Ink

    Copyright © 2023 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login