Industry. The key risks in Wholesale & Retail

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1 A QUICK GUIDE TO WHOLESALE & RETAIL INSIGHT FOR A CLEARER UNDERSTANDING OF CORPORATE RISK the value of WHOLESALE & RETAIL INSIGHT

2 Industry Insight Key RISKS Wholesale is a growing and evolving sector in the UK economy, covering enterprises from local distribution depots to substantial centralised national hubs. Retail is the UK s largest private sector employer, employing over three million people and generating sales of over 300 billion. To protect their businesses safely and adequately, Wholesalers and Retailers need industry experts like Zurich more than ever. That is why we have created a Wholesale & Retail proposition that provides tailored insurance coverage and access to risk relevant advice lots of benefits for Wholesale & Retail customers to buy into. The key risks in Wholesale & Retail FIRE DAMAGE Warehouses are critical to Wholesale & Retail businesses, so whilst it s fundamental to manage the fire inception and development hazards that could interrupt Warehouse operations and therefore the Business, we must not overlook the impact of damage at key Retail sites. HEALTH & SAFETY Retail locations vary significantly and there are a myriad of products and services sold through a wide spectrum of retail solutions. Potential hazards such as slips and trips; falls, manual handling; workplace transport, being struck or injured by objects, tools or equipment, need to be identified and prevented. Warehouse facilities are key to Wholesale businesses typically forming the hub of their operations. It is therefore important to manage and minimise the hazards they present to help prevent accidents. WATER DAMAGE TO STOCK Goods can be highly susceptible to flood damage caused by storm and rainfall which can severely affect property and revenue. THEFT High value theft attractive stock needs careful risk assessment and focus on risk management protections. BUSINESS INTERUPTION As well as fire damage and loss of buildings, wholesalers and retailers carry heavy business interruption exposures and dependencies, it is therefore key that customers develop resilience through business continuity ensuring that sales have the capacity to recover without undue delay. ENVIRONMENTAL The importance of green issues, environment clean up legislation and carbon reduction are all increasing. SUPPLY CHAIN INTERRUPTION Just-in-time Wholesale & Retail companies need products in the right place, in the right quantity at the right time. Major global catastrophic events can cause huge log jams in supply chains resulting in missed deliveries and seasonal windows or even breaches of contract. PRODUCT RECALL Against a background of hard to monitor imports from the Far East and heightened consumer rights and awareness, more retailers/resellers than ever are demanding product recall cover to deal with costs incurred dealing with faulty products. BRAND DAMAGE Mismanagement of a brand following a major incident such as property loss or product recall can severely damage a company s reputation and lead to severe loss of customer confidence and ultimately, shareholder value.

3 Insurance Insight cover and VALUE TRADE SPECIFIC COVER Extensions Automatically included as standard Material Damage Trace & Access 25,000 Limit Mitigation of Inevitable & Imminent Damage covers the costs of any measures that are taken to reduce Mitigation of Inevitable and Imminent Damage. 25,000 limit in the aggregate. Silent about limit once damage has occurred Brand Labels No specific limit Sprinkler Upgrade Adaption Clause 1 Disaster Recovery Our disaster recovery suppliers get companies back up and running quickly after an insured loss by finding alternative office space and setting up phone and internet connections to local networks as quickly as possible. Risk Management Advice Line Free, practical advice on risk management topics such as property, security, business continuity, environmental, food hygiene and health and safety, to help you proactively identify and manage issues before they occur. Business Interruption Unspecified Suppliers (UK) 100,000 Limit Unspecified Customers (UK) 100,000 Limit Property Stored (UK) 50,000 Limit Public Utilities 100,000 Limit Prevention of Access 50,000 Limit Accumulated Stocks 100,000 Loss of Attraction 50,000 Transit Extension (UK) 50,000 Essential Personnel 20,000 Limit Public Utilities Full Internet 5,000 Limit Action of competent authorities 50,000 Limit Refrigerated Stock 10,000 Limit Seasonal Stock 500,000 Limit Exhibitions 10,000 Limit Money/Assault including counselling Fines and Damages 100,000 Product Liability 1st Party Product Recall 100,000 Limit Public Liability Environmental Clean Up Costs sudden and unforeseen (not gradual) extension to Public Liability. LOI up to 1 million (any one period) and will form part of the LOI in the schedule Additional relevant covers and services Brand Protection Automatically included where Property and/or Casualty are purchased. This helps your customers to manage their reputation following a major loss in excess of 1 million under the Property and/or Casualty covers 50,000 Limit. Motor Fleet, Marine Cargo, Engineering Insurance and inspection services are also available for your Wholesale and Retail customers. Risk Insight Wider risk-related expertise Value Added Services By passing on value across the risk spectrum, we can give you and your Wholesale & Retail customers a broader understanding of their risk profiles. Some services are in-house, some are provided by our partners who are leaders in their fields. All of them give you added insight to help you win and safeguard customers. Zurich services: Supply Chain Risk Management & Assessment Risk Management Consultancy Mergers & Acquisitions Multinational Insurance UK based cross-border insurance Risk Profiling Wider risk-related services: Legal Experts Environmental Consultants Loss Adjusters Crisis Containment

4 KEY TRADE ACCEPTABILITY CRITERIA Zurich have the expertise to help you identify what to look for in terms of typical Wholesale & Retail risks. This includes how to understand good risk profiles, well managed hazards and key risk features to look for in Wholesale & Retail customers. What is the profile of a well managed risk? In General: We recognise that every customer is different but in terms of a good risk profile customers should be able and willing to: Demonstrate active Corporate Governance to identify, monitor and address all risk issues to the business Show a proactive approach to risk through structure and reporting mechanisms Show a systematic approach to risk issues by adopting management systems and risk control best practices Seek a long-term relationship with an insurer who will partner the business in controlling risk For Property Risk: A property of non-combustible construction, with a low to medium inception and flood hazard A proactive risk management approach, well managed, well protected and has good business resilience Enjoy good supply chain relationships For Casualty Risk: Have the right culture and structure to manage present and future risk as effectively as possible Adopt a management systems approach to health and safety incorporating best practice Adopt a systems based approach to product safety and environmental risk based on best practice Have an appreciation of the legal and regulatory climate and work with an insurer who brings new insights to their mitigation of business risk Well Managed Inception Hazards Light fitting and tubes kept well clear of stock Forklift battery chargers suitably guarded/segregated Free standing heaters guarded and clear of combustibles Top of storage racks kept clear of overhead heaters Smoking effectively controlled Suitable precautions with shrink wrap operations Suitable storage arrangements outside Modern, well maintained and tested electrical installations (and portable appliances) in good condition Hot Work adequately controlled Theft risk suitably assessed Money controls and regular banking arrangements Hazard Features Mitigating Loss Storage arrangements acceptable with fire doors and shutters in good working order and free from obstruction Good physical and alarm protections Suitable storage of LPG used for forklift trucks Separation of hazardous articles including aerosols Excellent waste removal and processes Maintenance of all fire fighting appliances Identification for specific consideration of all combustible panels and linings such as fireboard, EPS, PUR and PIR Compartmentation ideally through firebreak walls Acceptable risk features Building Construction Non-combustible Category of Goods Low combustibility goods/packaging, low to medium theft risks Inception Hazards Goods Handling, Maintenance, Management see profile of a well managed risk Method of Storage Non-combustible racking up to 4m. Can be negative in some circumstances but in others (purpose built, automated warehouses with best practice operations) it can be a positive feature Sprinkler Design Pressure, flow, distribution of heads in rack sprinklers

5 KEY TRADES WE RE FOCUSING ON We ve focused on specific groups of Wholesale & Retail trades where we want to grow our presence. 1 Machinery & Equipment Machinery tools Mining, construction and civil engineering machinery Machinery for the textile industry Agricultural machinery, accessories and implements UK firms 183* 3 construction materials & sanitary equipment Building materials and allied products Sale of timber and wood products Bricks and building supplies Bathroom and sanitary ware products UK firms 473* WHOLESALE 2 metals & ores Metal ores, concentrates and refined metal, primarily copper, lead and zinc Fittings and pipes, made of stainless steel and other metals Steel reinforcements and accessory products to the civil engineering and construction industry UK firms 199* 4 Hardware, plumbing & heating equipment Power tools, electrical goods and hardware Plumbing and heating goods and equipment Industrial engineering products and ironmongery UK firms 180*

6 5 Industrial electronic parts & Equipment Amusement machine and vending machines suppliers Alarm systems lighting fixtures and electrical appliances UK firms 121* 6 ComputerS, Computer Equipment and Software Office machinery and equipment Entertainment software and games consoles UK firms 121* 7 household goods Electronic household goods and other household goods Records, CDs, DVDs and equipment on which these are played Radios and televisions 8 Textiles, Clothing & Footwear The sale of textiles, clothing and leather goods Adult, childrens and infant clothing UK firms 643* UK firms 337* 9 Fresh Foods, Fruit and Vegetables & Flowers Processing/Packaging and distribution of fruit and vegetables Fresh and chilled products for food services sector Wholesale suppliers of flowers, plants and associated goods and services UK firms 429* 10 Other Wholesale Storage and warehousing Sports equipment Games and toys (excluding soft toys) Stationery and office supplies and equipment UK firms 2,366* * approximately

7 1 Groceries Newsagents Green grocer Butcher Fishmonger Bakers Off licence Other specialist foods UK firms 228* 3 5 Furniture & Hardware Carpet, wall and floor coverings Furniture and furnishings DIY Ironmongers UK firms 144* Clothing & Leisure Clothing Shoes Sports goods, fishing gear, camping goods, boats and bicycles shop Coffee shop Musical instruments Toys, arts and crafts UK firms 341* 2 Electrical equipment Computers hardware and software Household appliances Multimedia and technology UK firms 86* 6 Specialists 4 Cards and stationery Florists Pets Art galleries Online and mail order retailers Personal Care Cosmetics and toiletries Opticians Personal aids UK firms 68* RETAIL UK firms 166*

8 FOR FURTHER INSIGHT INTO WHOLESALE & RETAIL BUSINESS AND HOW WE CAN SAFEGUARD IT TOGETHER, TALK TO YOUR LOCAL CORPORATE UNDERWRITER, visit zurich.co.uk/broker or follow UKGI CHA Zurich Insurance plc Zurich Insurance plc, a public limited company incorporated in Ireland. Registration No Registered Office: Zurich House, Ballsbridge Park, Dublin 4, Ireland. UK Branch registered in England and Wales Registration No. BR7985. UK Branch Head Office: The Zurich Centre, 3000 Parkway, Whiteley, Fareham, Hampshire PO15 7JZ. Zurich Insurance plc is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. These details can be checked on the FCA s Financial Services Register via their website or by contacting them on Our FCA Firm Reference Number is Communications may be recorded or monitored to improve our services and for security and regulatory purposes. Copyright Zurich Insurance plc All rights reserved. Reproduction, adaptation, or translation without prior written permission is prohibited except as allowed under copyright laws.