WFM Enforces Higher Liability Insurance Requirements

LOS ANGELESWhole Foods Market (WFM) has recently begun enforcing higher liability insurance requirements, which will adversely affect dietary supplement suppliers insurance costs, according to Greg Doherty, dietary supplement practice leader at Poms & Associates Insurance Brokers Inc.

For the past several years, the insurance requirements for WFM have been unevenly enforced, often on a regional or even local basis, with exceptions made that deviated from corporate guidelines," Doherty said. "Virtually without exception, the deviations allowed suppliers to get by with insurance limits less than the corporate mandate. Now, WFM has decided to enforce the requirements with a 'no exceptions' policy."

 Interestingly, WFM has categorized dietary supplement companies in its highest of four risk categories, and the liability insurance requirements are $6 million per occurrence and $7 million aggregate.

 For companies selling or wanting to sell supplements in WFM, and which currently dont meet this requirement, this enforcement action will cost companies a lot of money in higher premiums, and in some cases, may be the tipping point between selling and not selling to WFM," Doherty said, adding Poms & Associates has developed an insurance facility that will take companies up to the required $6 million per occurrence/$7 million aggregate

Doherty said most of the big box drug chains, plus GNC and Vitamin Shoppe, have an insurance requirement of $5 million. "Last year Walgreens raised the bar to $20 million for their dietary supplement suppliers, and many of their suppliers are still struggling with that, as far as I can tell. There is speculation that the other large drug and box store chains will follow Walgreens and WFM and raise their requirements, and only the future will tell us if that happens."