What are the insurance requirements for a wholesale distribution business in my state?
The law asks a wholesale distributor for two things: workers' comp once you have employees, with a start point that differs by state, and liability coverage on any truck or van you own. Your landlord, lender and customers add their own insurance requirements. The table compares eight states.
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- Only two insurance requirements come from state law: workers' comp, and minimum liability limits on vehicles you own.
- Workers' comp starts at one employee in some states, at five in Missouri and at $20,000 of yearly payroll in Kansas.
- Leases, loans and customer agreements usually ask for more than the law does.
What does each state require of a wholesale distributor?
Every state in this guide requires workers' comp, but each starts at a different point, and each sets its own minimum liability limits for vehicles you own. Beyond those two, the rules that shape your insurance come from contracts.
Workers' compWorkers' Compensation Insurance that pays medical bills and lost wages when an employee is hurt or sick because of work. Insurers call it workers' compensation. more → pays an employee's medical bills and lost wages after a work injury. The auto figures read as the most the insurer pays per injured person, per accident, and for property damage, in thousands of dollars. They apply to a truck or van you own. Our workers' comp page and our commercial auto page show what each policy pays for.
| State | Workers' comp starts at | Auto minimum | Tied to a licence |
|---|---|---|---|
| Kansas | Payroll over $20K a year | $25K / $50K / $25K (K.S.A. 40-3107) | |
| Missouri | Five employees | $25K / $50K / $25K (RSMo 303.020) | |
| New York | One employee | $25K / $50K / $10K (Financial Services Dept.) | Food warehouse licence, Article 28-D |
| Pennsylvania | One employee | $15K / $30K / $5K (Driver and Vehicle Services) | Food establishment registration |
| Massachusetts | Every employer | $25K / $50K / $30K (G.L. c. 90, §34A) | |
| Louisiana | Every employer | $15K / $30K / $25K (La. R.S. 32:900) | |
| Maryland | Every employer | $30K / $60K / $15K (Md. Transportation §17-103) | |
| Washington | Through the state fund only | $25K / $50K / $10K (RCW 46.29.090) |
All as of 2026. Each workers' comp cell links to that state's law page. Massachusetts limits apply to policies issued or renewed on or after July 1, 2025. (Source: G.L. c. 90, §34O) Food wholesalers in most states also register with a state agency; ask yours whether it asks for proof of insurance. A wholesaler of general merchandise should ask the same question about any permit it holds.
Hiring your first employee? Read what changes when you hire. Most people who work for you count for workers' comp, including part-time and seasonal staff. Whether a contractor or a temp counts depends on your state's test and on who directs the work, so check the state page before you assume someone is outside it.
Do the federal truck rules apply if I only deliver my own goods?
The federal $750,000 liability minimum is written for carriers that haul other people's goods for pay. (Source: federal regulations, part 387) If you only deliver your own goods, ask your agent how the federal rule and your state's minimum apply to your trucks.
Either way, the state figures in the table are the floor for a truck you own, and customers often ask for more. Hauling hazardous materials, such as bulk chemicals, brings a higher federal minimum, so tell your agent if you do; our hazmat guide covers the exposure. When staff drive their own cars on a delivery run, or you hire a carrier, hired and non-owned autoHired and Non-Owned Auto Liability coverage for accidents in vehicles your business does not own, such as rentals or an employee's personal car used on a work errand. Insurers call it hired and non-owned auto. more → coverage is designed to answer for it, because the policy on your own trucks does not cover a car you do not own.
What do my landlord, lender and customers require on top of the law?
Often, your landlord and lender will have specific insurance requirements you must meet to stay in compliance with your lease and loan. They are usually higher than any state law here, and they follow you into every state.
A warehouse lease usually names the liability limits you must carry and asks to be listed on your policy as an additional insuredAdditional Insured Another person or business covered under your liability policy for claims tied to your work or property, such as a landlord or general contractor. Insurers call them an additional insured. more →. The Small Business Administration requires property insurance on pledged assets for its larger loans, those over $500,000. (Source: federal regulations, 13 §120.160) Lenders and landlords usually want a one-page certificateCertificate of Insurance (COI) A one-page proof of your coverage, showing the insurer, policy number, and limits, that you hand to a landlord or client. Insurers call it a certificate of insurance. more → as proof. Our guides to warehouse lease requirements and vendor agreements show what to look for, and the certificate explainer shows what a certificate says. Many customer agreements ask for an umbrella on top of your base liability limits; read the insurance page of each before you sign.
What is different about Kansas for a wholesale distributor?
Kansas counts payroll, not people. The test looks at last year's payroll and this year's estimate, and wages paid to relatives are left out. (Source: K.S.A. 44-505)
A wholesaler with seasonal crews should check both figures before deciding it is under the line.
What is different about Missouri for a wholesale distributor?
Relatives within the third degree count toward Missouri's five employees. (Source: RSMo 287.030)
A family-run wholesaler with three warehouse staff, a driver and a brother on the books has five people counting toward the line.
What is different about New York for a wholesale distributor?
A New York food warehouse needs a licence under Article 28-D of the state's agriculture law. (Source: New York State Department of Agriculture and Markets)
Repacking, slicing or refrigerated storage can change which article applies, so ask the department which one fits your operation.
What is different about Pennsylvania for a wholesale distributor?
Pennsylvania asks food distributors and warehouses to register with the Department of Agriculture, with an inspection first. (Source: Pennsylvania Department of Agriculture)
The registration costs $35 a year, and part-time and family employees count for workers' comp from the first.
What is different about Massachusetts for a wholesale distributor?
Massachusetts raised its auto minimums for policies issued or renewed on or after July 1, 2025. (Source: G.L. c. 90, §34O)
A renewal can show higher limits than last year's policy, so compare the two before you assume nothing changed.
What is different about Louisiana for a wholesale distributor?
Louisiana sets a heavier minimum for motor carriers over 20,000 pounds: $25K / $50K / $25K up to 50,000 pounds, and $300,000 combined above that. (Source: La. R.S. 32:900)
That matters only if you run heavy trucks. A wholesaler that hires outside haulers can, in some cases, be treated as their employer for workers' comp, depending on its written contracts and whether the hauling is part of its own business, so ask your attorney how your contracts read. (Source: La. R.S. 23:1061)
What is different about Maryland for a wholesale distributor?
A paid officer of a corporation, or a paid member of an LLC, counts as a covered employee unless an opt-out applies. (Source: Md. Labor & Employment §9-206)
That matters in an owner-run wholesaler.
What is different about Washington for a wholesale distributor?
Washington sells workers' comp only through its state fund, so an agent cannot shop it among private insurers. (Source: RCW 51.16.060)
The fund prices by hours worked and has separate classes for general-merchandise warehouses and for wholesale stores. (Source: Washington Administrative Code 296-17A-2102) Give your agent hours split between floor and desk work.
Common questions about wholesale distributor insurance requirements
Most people who work for you count, including part-time and seasonal staff. Whether a contractor or a temp counts depends on your state's test and on who directs the work, so check the state page.
No. Each state's rules apply to the staff and vehicles there; see adding a location in a new state.
They are the least the law accepts, not what a serious crash can cost, and a lease, lender or customer may ask for more.
Check what your wholesale business has to carry
Send us your state and the insurance page of your lease or vendor agreement, and we'll sort what comes from the law and what comes from the contract.