Wholesale Insurance: How it Works

Wholesale insurance has long been a familiar presence in the insurance arena, serving a vital function by offering tailored coverage to both businesses and individuals with distinct requirements. This guide delves into the nuances of wholesale insurance, elucidating its definition, operational mechanics, available coverage options, and more.

Wholesale Insurance

Whether you run a business and need special insurance or you just want to learn about wholesale insurance, this guide is here to help. Take your time to read through it all—it’s packed with useful info to give you a solid grasp of the topic.

What Is Wholesale Insurance?

Wholesale insurance, also referred to as franchise insurance, provides coverage for small employer groups that do not meet the requirements for traditional group coverage. This type of policy covers the entire group, with individual policies issued for each member. It is important to note that wholesale insurance policies are typically offered by non-admitted carriers, which are insurance companies that have not received approval from the state’s insurance department.

How Does Wholesale Insurance Work?

Wholesale insurance is a specialized type of insurance designed for small groups, often with less than 10 employees, who don’t qualify for standard group insurance. Each person in the group receives their own policy but with the same basic coverage. Employers may offer wholesale insurance as a benefit, cover the cost, or allow employees to purchase it.

However, it’s important to note that wholesale insurance is provided by companies outside of the traditional regulatory framework, known as surplus line or excess line carriers. This means they operate differently and may pose a higher risk of not paying claims if they go bankrupt. Therefore, careful consideration is needed when selecting a wholesale coverage provider.

Wholesale insurance offers a diverse range of products tailored to the specific needs of small businesses, including:
  • Environmental liability coverage for unforeseen environmental hazards
  • High-risk liability protection for chemical and flammable incidents
  • Product failure coverage for pharmaceutical and medical products
  • Privacy protection solutions to mitigate identity theft risks
  • Critical safety products for transportation-related risks
  • Construction-related structural integrity coverage for building and development projects
These products are designed to address specific risk exposures and provide comprehensive protection for small businesses operating in various industries.

What Does It Cover

Wholesale insurance, also called surplus lines insurance, is for things that regular insurance doesn’t cover because they’re unusual or risky. Here are some examples:
  1. Environmental liability: This covers problems like pollution or contamination.
  2. High-risk liability: It helps businesses that work with dangerous stuff like chemicals or flammable materials.
  3. Product failure: If something goes wrong with a product, like a defect or recall, this insurance can help, especially for things like medicine or medical devices.
  4. Privacy protection: This covers things like identity theft or cyber-attacks.
  5. Transportation risks: It helps with special risks in transportation, like cargo, marine, or aviation.
  6. Construction-related risks: This insurance covers problems in the building, like structural issues or defects.
  7. Speciality professional liability: It’s for professionals like architects or engineers who have specific risks in their work.
  8. Excess liability: This gives extra coverage beyond what regular policies offer.
  9. Umbrella coverage: It adds more protection for really big losses or unexpected events.
  10. Specialized property coverage: This is for unique or expensive things like fine art, jewellery, or equipment.

Remember, wholesale insurance is made for specific, often risky situations, and policies can be changed to fit each business’s needs.

What It Doesn’t Cover

Wholesale insurance, also called surplus lines insurance, usually doesn’t cover certain things:

  1. Regular risks: It doesn’t cover everyday risks that normal insurance already handles.
  2. Personal stuff: It doesn’t cover personal things like health, life, or car insurance.
  3. Workers’ comp: This insurance is often required and is given by state programs or regular insurance companies.
  4. Boss responsibility: It might not cover cases where the boss is responsible, as that’s usually handled by workers’ comp.
  5. Property damage: It might not pay for damage to your own stuff, as regular property insurance does that.
  6. Business problems: It usually doesn’t cover losses from normal business problems.
  7. Cyber-attacks on personal info: While it might cover cyber-attacks, it might not cover attacks on your personal information, which need special cyber insurance.
  8. Floods and earthquakes: These big disasters are usually not covered by wholesale insurance.
  9. Nuclear accidents: It won’t cover accidents or radiation from nuclear stuff.
  10. War and terrorism: Wholesale coverage often doesn’t cover damage from wars, terrorism, or political unrest.

Remember, what’s excluded can change depending on the policy and company. So, it’s important to read your policy carefully to know what’s covered and what’s not.

How Much Does Wholesale Insurance Cost

The cost of wholesale coverage varies depending on factors such as market conditions, underwriting and risk assessment, loss experience, reinsurance costs and the regulatory environment. Wholesale insurance, also known as franchise insurance, is coverage for employer groups that are too small to qualify for true group coverage.

Companies That Offer This Insurance

Here are some companies that offer this Insurance:

  • AmWINS Group
  • Burns & Wilcox
  • Worldwide Facilities
  • CRC Group
  • RT Specialty
  • Breckenridge Insurance Group
  • USG Insurance Services
  • Ryan Specialty Group
  • Wholesale Trading Insurance Services (WTIS)
  • Risk Placement Services (RPS)

These Insurance companies’ options are only a few, but there are many other companies that offer Wholesale Backup coverage. It’s really important to carefully look into and compare different policies. Then, find the one that fits your needs the best.


Wholesale insurance is a special type of insurance that gives customized protection for things that are extra risky or unusual and aren’t covered by regular insurance. It’s provided by companies that aren’t officially approved to sell insurance in a particular area.

This kind of insurance lets you create policies that fit your exact needs, covering risks like environmental problems, product issues, and privacy concerns.

Though there are some things not covered and the rules can differ, wholesale insurance is really important for giving financial safety and helping manage risks for businesses and people who need more specialized insurance.


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