What Is Warehouse Insurance?

Warehouse Insurance is commercial insurance arranged to protect businesses and property owners against specified risks associated with warehouse premises, storage activities and distribution operations.

Depending on the business and insurer, cover may include buildings, stock, contents, machinery, Public Liability, Employers’ Liability, business interruption and specialist liability for goods held on behalf of customers.

Insurance requirements can vary significantly depending on whether you:

• Own a warehouse and operate your own business from it.
• Lease a warehouse for storage or distribution.
• Own a warehouse that is let to another business.
• Store goods belonging to third-party customers.
• Operate a fulfilment or logistics facility.
• Provide warehousing as part of a wider transport business.

The policy should accurately reflect your responsibilities, the goods stored and the activities carried out at the premises.

What Does Warehouse Insurance Cover?

A warehouse insurance arrangement may include a combination of the following covers, subject to insurer acceptance and policy terms.

Not every cover is automatically included. All protection is subject to the policy wording, limits, sums insured, excesses, exclusions and conditions.

Warehouse Buildings Insurance

Warehouse buildings can represent a substantial investment and may contain valuable infrastructure, racking systems and other fixed installations.

Buildings insurance may provide protection against specified damage caused by events such as:

• Fire and explosion.
• Storm and flood, where covered.
• Escape of water.
• Impact damage.
• Malicious damage and vandalism.
• Other insured perils included in the policy.

Whether buildings insurance is your responsibility will depend on whether you own or lease the warehouse and the terms of any lease.

The buildings sum insured should generally reflect an appropriate reinstatement value rather than simply the property’s market value.

For broader information, see our Commercial Property Insurance page.

Warehouse Stock Insurance

Stock can be one of the most valuable assets held within a warehouse.

Businesses may store finished products, raw materials, packaging, components or goods awaiting distribution.

When arranging stock insurance, important considerations include:

• The maximum value of stock held at any one time.
• Seasonal fluctuations in stock levels.
• The types of goods stored.
• Whether goods are owned by the business or by customers.
• Storage methods and racking arrangements.
• Fire protection and security measures.
• Whether stock is stored at additional locations.
• Any special storage requirements.

Insurers may apply additional conditions or restrictions to particular goods, including hazardous materials, high-value electronics, combustible stock or temperature-sensitive products.

It is essential to accurately disclose the nature and value of goods stored.

Warehousekeepers’ Liability Insurance

Businesses that store goods belonging to customers may face different insurance responsibilities from businesses storing only their own stock.

For example, a warehouse operator may hold goods on behalf of manufacturers, retailers, wholesalers or other commercial customers.

If those goods are lost or damaged, the operator may face a claim depending on the circumstances and contractual arrangements.

Warehousekeepers’ Liability Insurance may provide protection against certain legal liabilities for customers’ goods while they are in the warehouse operator’s care, custody or control.

Important considerations include:

• Whether the warehouse operator is legally liable for the loss.
• Terms and conditions of storage contracts.
• Any contractual limitations of liability.
• The maximum value of customers’ goods held.
• The nature of the goods stored.
• Whether goods are also handled or transported.
• Policy exclusions and liability limits.

Warehousekeepers’ Liability Insurance is not the same as insuring all customers’ goods for their full replacement value.

Where full-value goods cover is required, separate or additional insurance arrangements may be necessary.

Warehouse Insurance for Storage and Distribution Businesses

Warehousing businesses can operate in different ways, and insurance should reflect the activities undertaken.

Specialist activities, hazardous goods or unusual storage arrangements may require additional underwriting information.

Fire Insurance for Warehouses

Fire is one of the most significant risks facing warehouse operators and property owners.

A serious warehouse fire can damage the building, destroy large quantities of stock and interrupt operations for an extended period.

Insurers may consider:

• Building construction and roof materials.
• The type and combustibility of goods stored.
• Stock quantities and storage heights.
• Racking systems and warehouse layout.
• Fire detection and alarm arrangements.
• Sprinkler systems and other fire protection.
• Battery charging and electrical equipment.
• Hot works and maintenance activities.
• Housekeeping and waste management.
• Previous fire incidents and claims.

Some policies may impose specific conditions relating to fire protection, storage arrangements and maintenance.

These conditions should be reviewed carefully, particularly where the warehouse contains combustible or higher-risk goods.

Forklift Truck and Warehouse Machinery Insurance

Forklifts, pallet trucks, conveyors and other machinery are commonly used to move goods around warehouses.

These activities can create risks involving employee injury, property damage and damage to stock.

Insurance considerations may include:

• Accidental damage to insured machinery.
• Machinery breakdown, where covered.
• Damage caused to third-party property.
• Employee injury claims.
• Hired or leased equipment.
• Use of forklifts in external yards or public areas.
• Motor insurance requirements where relevant.

Forklift trucks and other mobile equipment may require separate insurance arrangements depending on their use and where they operate.

Businesses should also consider relevant inspection, maintenance and operator training requirements.

Employers’ Liability Insurance for Warehouse Workers

Most UK businesses employing staff are legally required to maintain Employers’ Liability Insurance, subject to exemptions.

The minimum required cover is generally £5 million, although many commercial policies provide £10 million.

Warehouse employees may face risks involving:

• Manual handling and lifting injuries.
• Forklift trucks and other moving vehicles.
• Falls from height.
• Slips, trips and falls.
• Falling stock or unstable racking.
• Loading and unloading operations.
• Machinery and conveyor systems.

Employers’ Liability Insurance may respond to qualifying claims involving work-related injury or illness.

Appropriate risk assessments, training, supervision and safe systems of work remain essential.

Public Liability Insurance for Warehouses

Warehouse premises may be visited by delivery drivers, contractors, suppliers, customers and other third parties.

Public Liability Insurance may respond to certain legal liability claims involving accidental injury or damage to third-party property arising from insured business activities.

Potential exposures include:

• Visitors slipping or tripping on warehouse premises.
• Accidental damage to third-party property.
• Incidents involving loading areas or external yards.
• Other qualifying accidents involving visitors.

However, standard Public Liability Insurance may restrict or exclude damage to goods in your care, custody or control.

Warehouse operators storing customers’ goods should therefore consider whether specialist Warehousekeepers’ Liability cover is needed.

Warehouse Business Interruption Insurance

If a fire, flood or other insured incident prevents a warehouse from operating, the financial impact may continue long after the initial damage.

Businesses may lose income, incur additional expenses and face disruption to customer contracts.

Business Interruption Insurance may provide protection against certain financial losses following an insured event.

Important considerations include:

• The events that trigger cover.
• The appropriate gross profit or revenue sum insured.
• The maximum indemnity period.
• The time required to repair or rebuild warehouse premises.
• Replacement of machinery and racking.
• Potential temporary relocation costs.
• Dependencies on suppliers and customers.

Business interruption cover does not automatically respond to every supply chain disruption or loss of customer demand.

Learn more about Business Interruption Insurance.

Goods in Transit Insurance for Warehouse Businesses

Warehouse operators and distribution businesses may transport goods between suppliers, storage facilities and customers.

Goods in Transit Insurance may provide cover for specified loss or damage to insured goods during transportation.

Important considerations include:

• Whether the goods belong to the business or to customers.
• Who is responsible for insuring goods in transit.
• Whether transport is undertaken using owned vehicles or subcontractors.
• The maximum value of goods carried.
• Loading and unloading exposures.
• Territorial limits.
• Unattended vehicle and security conditions.

Transport operators may also need specialist carriers’ liability insurance depending on their contractual responsibilities.

Explore our Goods in Transit Insurance page.

Warehouse Insurance for Rented Premises

Many warehouse businesses operate from leased commercial premises.

Insurance responsibilities may be divided between the landlord and tenant under the lease.

For example, a landlord may insure the building while the tenant is responsible for stock, machinery, business contents and liability insurance.

Important considerations include:

• Who is responsible for buildings insurance.
• Ownership of racking and fixed installations.
• Tenant improvements and alterations.
• Insurance requirements contained in the lease.
• Responsibility for machinery and equipment.
• Property Owners’ Liability and occupiers’ liability exposures.

Insurance arrangements should reflect the responsibilities and assets of each party.

Warehouse Security and Theft Prevention

Warehouses can contain substantial quantities of valuable goods and may be attractive targets for theft.

Insurers may consider the effectiveness of security arrangements when assessing a risk.

Measures may include:

• Suitable locks and access controls.
• Intruder alarms and monitoring where appropriate.
• CCTV and external lighting.
• Secure loading bays and external yards.
• Stock control and inventory procedures.
• Restricted access to high-value goods.
• Staff training and security procedures.
• Regular review of security arrangements.

Some policies contain specific security warranties or conditions. Failure to meet applicable requirements can affect insurance protection.

Warehouse Risk Management and Business Continuity

Effective risk management can help reduce the likelihood and severity of warehouse losses.

Important areas to consider include:

• Fire risk assessments and prevention measures.
• Safe storage and stacking of goods.
• Inspection and maintenance of racking systems.
• Forklift and pedestrian segregation.
• Machinery maintenance and operator training.
• Security and stock management.
• Flood and water damage prevention.
• Supply chain dependencies.
• Business continuity and disaster recovery planning.

Warehouse operators should also consider how quickly operations could resume following a major insured incident.

Further information about workplace safety is available from the Health and Safety Executive.

Important Warehouse Insurance Exclusions

Warehouse insurance policies can contain exclusions and conditions that materially affect the protection available.

Areas requiring particular attention include:

• Undisclosed hazardous or combustible goods.
• Stock values exceeding declared limits.
• Goods belonging to third-party customers.
• Care, custody and control exclusions.
• Wear and tear or gradual deterioration.
• Machinery breakdown exclusions.
• Unoccupied property restrictions.
• Fire protection and security conditions.
• Flood or other location-specific exclusions.
• Goods in transit limitations.
• Contractual liabilities beyond insured legal liability.
• Failure to comply with applicable policy conditions.

Warehouse operators should pay particular attention to the distinction between insurance for their own goods and liability for goods belonging to customers.

How Much Does Warehouse Insurance Cost?

The premium depends on the warehouse, the goods stored and the activities undertaken.

It’s important to compare the scope of cover as well as the premium, particularly where insurers apply different stock, fire protection or liability conditions.

What Information Is Needed for a Warehouse Insurance Quote?

To help us approach suitable insurers, we may request:

• Your business name and trading history.
• The warehouse address and building construction.
• Whether you own or lease the premises.
• The nature of the business and warehouse operations.
• Types of goods stored.
• Maximum stock values.
• Whether goods belong to you or third-party customers.
• Annual turnover and employee numbers.
• Details of forklifts, machinery and racking.
• Fire protection and security arrangements.
• Whether goods are transported or distributed.
• Required buildings, contents and liability limits.
• Business interruption requirements.
• Previous insurance claims.

Insurers may request additional information where the warehouse stores hazardous, high-value or unusual goods.

Frequently Asked Questions About Warehouse Insurance

What insurance does a warehouse need?

Warehouse businesses commonly consider buildings, stock, contents, Public Liability, Employers’ Liability and business interruption insurance. Additional cover may be needed for customers’ goods, machinery or goods in transit.

Does Warehouse Insurance cover stock?

Stock insurance may provide cover for specified loss or damage to insured goods, subject to declared values and policy terms.

Does Warehouse Insurance cover customers’ goods?

Not automatically. Businesses storing goods belonging to customers may require Warehousekeepers’ Liability Insurance or other specialist arrangements.

Do warehouses need Public Liability Insurance?

Public Liability Insurance is not universally compulsory by law, but it may be required by landlords, customers or contracts and can provide important protection against certain third-party claims.

Does Warehouse Insurance cover forklift trucks?

Cover may be available for forklifts and other equipment, but separate machinery, liability or motor insurance arrangements may be required depending on their use.

Can I insure a rented warehouse?

Yes. Tenants may insure their stock, equipment, contents and business liabilities, while buildings insurance responsibilities should be checked against the lease.

Does Warehouse Insurance cover business interruption?

Business interruption cover may be available for specified financial losses following an insured event, subject to policy terms and indemnity periods.

Can I insure a warehouse storing hazardous goods?

Some insurers may consider specialist storage risks, depending on the type and quantity of goods, safety arrangements and other underwriting information.

Why Choose Edison Ives for Warehouse Insurance?

Warehouse businesses can have complex insurance requirements, particularly where large stock values, machinery, third-party goods and contractual liabilities are involved.

At Edison Ives, we help warehouse operators and property owners explore commercial insurance suited to their premises and activities.

• Commercial insurance broking support for warehouse businesses.
• Consideration of buildings, stock and equipment risks.
• Attention to goods held on behalf of customers.
• Review of Public Liability and Employers’ Liability requirements.
• Consideration of fire protection, security and business interruption.
• Help understanding policy exclusions, limits and endorsements.

Part of David Roberts & Partners

Edison Ives is proud to be part of David Roberts & Partners Ltd, an independent insurance broker group.

Our group relationship supports access to wider insurance expertise and markets while allowing us to maintain a personal approach to our clients.

Other Commercial Insurance Services

Depending on your business activities, you may also wish to explore:

Contact Edison Ives

Call 0113 390 4646

Email info@edinsure.co.uk