What is warehouse insurance?

Warehouse insurance is a combined commercial policy for businesses that store, distribute or process goods from a warehouse or storage unit. It typically covers the building (if you own it), stock and contents, plant and racking, public and employers liability, and lost income if the operation is interrupted by an insured event. Businesses that hold goods belonging to customers add warehouse keepers liability, also called bailees cover. It is arranged as one package rated on the premises, the goods and the activities carried out.

What type of insurance is needed for a warehouse?

Most warehouses need stock and contents cover for goods, racking and plant; public liability for visitors, drivers and contractors on site; employers liability, which is compulsory once you employ anyone; and business interruption to replace lost income after a fire or flood. If you own the building you add buildings cover; if you lease it, the landlord normally insures the structure. Operators who store goods for customers need warehouse keepers or bailees liability, and businesses that move goods add goods in transit. These are usually combined into one warehouse or commercial combined policy, subject to insurer terms, limits and exclusions.

Does warehouse insurance cover stock?

Yes, stock and contents cover is the core of most warehouse policies. It covers your own goods against fire, flood, escape of water, theft and accidental damage, usually on a sum insured that reflects the maximum stock value held at any one time, not the average. Seasonal peaks should be declared, either with a higher sum insured or a seasonal uplift clause. Goods that belong to your customers are not your stock and are insured separately under warehouse keepers or bailees liability. Stock in transit needs goods in transit cover.

Does warehouse insurance cover deterioration of stock in cold storage?

Not as standard. Deterioration of stock is an extension that covers chilled or frozen goods spoiled by a rise or fall in temperature after a breakdown of the refrigeration plant or a failure of the public power supply. Insurers usually make it conditional on temperature alarms, a maintenance contract for the plant and sometimes standby power, and they apply their own excess and limits. Cold stores and food distribution warehouses should ask for it by name and declare the maximum value of temperature-controlled stock held at any one time.

Do I need warehouse insurance if I rent the warehouse?

Yes. Renting removes the need for buildings insurance, which the landlord normally arranges and recharges through the lease, but everything else still falls to you: stock and contents, plant, tenant improvements, public liability for visitors and drivers, employers liability for staff, business interruption, and liability for any customer goods you hold. Check the lease for the insurance obligations it places on the tenant, including any requirement to insure glass, fixtures or the landlord interest.

What is warehouse keepers liability insurance?

Warehouse keepers liability, also called bailees cover, protects a business that stores goods belonging to other people. If those goods are lost, stolen or damaged while in your care, the owner will look to you for the loss. Standard contents cover does not respond because the goods are not yours. The cover is usually written to the limits and conditions in your storage contract or trading terms, such as UKWA conditions, so the wording and the contract need to match.

How much does warehouse insurance cost?

There is no standard figure and no premium can be quoted responsibly without the details of the operation. Insurers rate on the sums insured for buildings, stock and plant, the type of goods (high-value, flammable or perishable stock costs more), the construction and age of the building, fire protection such as sprinklers and alarms, security, the number of employees, whether customer goods are held, turnover, location and flood exposure, and claims history. A specialist broker needs those details before approaching insurers.

Is it illegal to run a warehouse without public liability insurance?

No. Public liability insurance is not a legal requirement in the UK, but most warehouse operators carry it because hauliers, contractors and customers come onto the site, and many leases, landlords and storage or distribution contracts require it. Employers liability insurance is different: it is a legal requirement for almost every business that employs staff. A broker can advise on suitable limits for the contracts you hold.

Is employers liability insurance required for warehouse staff?

Yes. Employers liability insurance is compulsory under the Employers Liability (Compulsory Insurance) Act 1969 for almost every business that employs anyone, with a minimum limit of 5 million pounds and most policies written at 10 million. Warehouses carry higher-than-average injury exposure from forklifts, racking, manual handling and working at height, so insurers will ask about training, safe systems of work and accident records. Agency and temporary workers under your control are normally treated as employees for this purpose.

Warehouse Insurance: A Complete UK Guide

Warehouse insurance covers the specific risks faced by storage and distribution businesses, including buildings, stock, goods in transit, and public liability.

Cover is subject to underwriting, insurer terms and acceptance. Policy limits and exclusions apply.