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Mid-market insurance
Footwear and apparel wholesaler insurance is a programme protecting importers' cargo, warehoused stock, product liability and trading income. It matters because importers can carry the same liability as the overseas factory.
Part of: Commercial insurance
In short
Footwear, clothing and dry goods wholesalers usually need marine cargo or stock throughput cover, property and business interruption, products liability written for an importer, employers' liability, and often cyber, crime, trade credit and management liability. Under the Consumer Protection Act 1987, an importer into the UK can be liable for defective products as if it were the producer. Stock at third party warehouses usually needs your own cover, and cargo policies commonly exclude delay. New brands, sourcing countries and warehouses are the usual triggers for a programme review.
A footwear, clothing or dry goods wholesaler that imports from overseas usually needs cover in three places: goods at sea and in the air, goods in warehouses (its own and third party), and goods once they reach customers. That typically means marine cargo or stock throughput cover, property and business interruption, products liability written for an importer, employers' liability, and usually cyber, crime, trade credit and management liability. Many businesses hold these in a wholesale package within a wider commercial programme.
The sector's distinctive features are seasonality, long supply chains and the legal position of an importer. Stock peaks ahead of each season, much of it sits in containers or a third party logistics warehouse, and in UK law the importer can carry the same product liability as the overseas factory.
Under section 2 of the Consumer Protection Act 1987, liability for damage caused by a defective product falls on the producer, on anyone who holds themselves out as the producer by putting their name or trade mark on the product, and on anyone who imported the product into the United Kingdom in the course of business to supply it to another. A supplier who cannot identify the producer or importer when asked can also become liable.
The GOV.UK guidance on the General Product Safety Regulations 2005 says producers include UK-based importers where the manufacturer is not established in the UK and has no UK representative. Producers must place only safe products on the market, mark products for traceability where reasonable, investigate complaints and notify an enforcement authority in writing if they know a product poses an unacceptable risk. Distributors also have duties of care, traceability and cooperation with recalls. Local trading standards enforce the rules for consumer goods. Textiles also have their own labelling rules on fibre content.
For insurance, this means products liability should be written on the basis that you are an importer and, for own-brand ranges, the holder of the brand. Questions to settle with your broker:
| Exposure | Typical scenario | Cover that usually responds |
|---|---|---|
| Cargo loss or damage in transit | Container damaged by water ingress, or lost overboard | Marine cargo; see cargo insurance |
| Stock at your warehouse | Fire or sprinkler leakage in pre-season stock | Property damage on stock, with seasonal peak provisions |
| Stock at a third party warehouse | Fire at a logistics provider's site | Your own stock or throughput cover; the operator's warehousekeeper liability is usually limited by contract |
| Loss of trading | Damage at the distribution centre during the autumn peak | Business interruption; supplier and customer extensions where agreed |
| Defective product injury | Footwear sole failure causes a fall, or a dye causes a skin reaction | Products liability written for an importer and brand owner |
| Customer insolvency | A retail customer enters administration with unpaid invoices | Trade credit insurance |
| Ransomware or EDI outage | Order processing and customer portals unavailable | Cyber |
| Payment diversion or stock theft by staff | Supplier bank details changed by email; stock leaving without invoices | Crime, depending on the wording |
| Warehouse staff injury | Manual handling, racking or forklift accident | Employers liability, at not less than £5 million per occurrence by law |
| Director and employment claims | Dispute with a former director or redundancy claim | Management liability |
These are illustrative scenarios, not real claims.
A container of winter boots arrives damaged by seawater. Marine cargo responds to the physical damage, subject to the terms. The late arrival of replacement stock and lost sales are usually not covered by cargo insurance, because delay is a common exclusion. Our guide to importer and exporter insurance explains the usual gaps.
A wholesaler keeps most of its stock at a logistics provider's site. After a fire, the provider points to its standard trading conditions, which limit its liability, often by reference to weight rather than value. The wholesaler's recovery depends almost entirely on its own stock cover listing that location at the right value.
A distributor commissions an own-label trainer from an overseas factory. If the product causes injury, the distributor can be liable as importer and as the person holding itself out as producer. Consumer brands selling direct may also find our page on retail, wholesale and online brands useful.
Growing importers should run an insurance programme review when they launch an own brand, add a new sourcing country, move to a third party warehouse, start selling direct to consumers, enter new export markets or take on a major retail account. A combined stock throughput policy, or marine cargo cover alongside property, is often worth comparing at that point.
Apex arranges insurance programmes for footwear and apparel wholesalers and importers; a broker reads every enquiry.
Yes, it can be. Section 2 of the Consumer Protection Act 1987 makes a person who imports a product into the UK in the course of business to supply it to another liable for damage caused by a defect, alongside the producer. Products liability insurance should be written on that basis.
Stock throughput combines marine cargo and stock cover in one policy, following goods from the overseas supplier through warehouses to the customer. Importers with large seasonal stocks and several locations often find it reduces gaps between separate transit and property policies, subject to the terms.
Usually not. Cargo policies commonly exclude loss caused by delay, even where the delay follows an insured event. Lost sales from late seasonal stock generally need to be managed through contingency planning, and in some cases through business interruption extensions that are agreed separately.
Not usually in full. The operator's insurance mainly covers its own legal liability, and standard trading conditions often limit that liability. Your own stock or stock throughput policy should normally list the location and its peak value, subject to the policy terms.
It is not compulsory, but wholesalers selling on credit to retailers often consider it because a single customer insolvency can wipe out a season's margin. Trade credit insurance covers unpaid debts on agreed terms and usually comes with credit limits on named buyers.
Send us your current schedules or renewal pack and we will review the whole programme and tell you plainly what to keep and what to change. No fee and no obligation. Or call 0117 325 0027.
Book a programme review Get a quoteApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
