Vendor insurance is a type of specialty insurance that helps to provide liability protection when a vendor is conducting some type of activity in a public venue, or even on property owned by a customer. Sometimes known as vendor liability insurance, the coverage provides several key benefits that make it easier for vendors to participate in trade shows, festivals and other types of public events. Available as both stand-alone coverage and as part of what is known as a master policy, vendor insurance can be expensive, but is often considered necessary.
One of the main advantages of vendor insurance is that the coverage provides protection in the event that some unfortunate event occurs as the result of the vendor’s presence at a fair, parade, or other type of covered public activity. The scope of coverage will vary, but vendor plans such as event liability insurance or exhibitor insurance will often cover physical injuries sustained as the result of a visit to the vendor’s stand or exhibit booth. This means that a street vendor selling food at an outdoor concert is protected in the event that someone is accidentally burned by a hot liquid or becomes ill after consuming food prepared by the vendor.
Another benefit of vendor insurance is the ability to participate in festivals, trade shows and other events open to the public. Today, many venues insist that any vendors who are approved to exhibit or sell items during an event must provide proof of liability coverage as part of the application process. Without the event insurance in place, there is a good chance that the application will be rejected, and the vendor will not be allowed to set up his or her stand, a situation that could result in the loss of a considerable amount of income.
Many municipalities require vendor insurance in order to secure a business permit or license to operate within the city limits of the municipality. Maintaining that coverage is also considered very important. Depending on the provisions related to the permits, a municipality may, at its discretion, periodically check on the status of vendor’s insurance coverage. Should the investigation show that the vendor has allowed the coverage to lapse, or that the present cover is not sufficient to comply with city standards, the permit may be revoked. From this perspective, securing and maintaining vendor insurance helps the vendor to secure the documents necessary to do business legally within a given jurisdiction and have the chance to earn a regular income from the venture.
