What is warehouse goods insurance

Insurance of goods in a warehouse protects inventory — raw materials, finished products, goods for resale — against destruction, damage and theft. It should be distinguished from insurance of the warehouse building itself: walls, roof and equipment are insured as a separate object, and goods as another. There is also a third option — insurance of the warehouse owner's liability to the clients whose goods it stores.

Who can be the policyholder

The owner of the goods

The company that owns the inventory insures it in its own or a rented warehouse. For many trading and manufacturing companies, goods are the main current asset, and losing them can bring the business to a halt.

The warehouse owner or logistics operator

Under a storage contract, the custodian is liable for loss, shortage or damage to the goods accepted (Articles 901 and 902 of the Civil Code), and a professional custodian is liable even without fault unless it proves force majeure, the nature of the goods, or intent or gross negligence of the depositor. A warehouse operator may therefore use custodian liability insurance or insure clients' goods in their favour — under Article 930 of the Civil Code this is allowed if the beneficiary has an interest in preserving the property.

Which risks to include

  • fire, lightning, explosion;
  • water damage from water supply, heating, sewage and sprinkler systems;
  • natural disasters;
  • burglary, robbery, armed robbery, malicious damage;
  • falling objects, vehicle impact, collapse of racking;
  • for perishable goods — spoilage due to refrigeration breakdown or power outage.

Usually not covered: shortages found at stocktaking without signs of theft, natural loss, deterioration due to the nature of the goods, and breaches of storage conditions.

How to set the sum insured

The main difficulty is that stock levels change all the time. The market uses several approaches:

  • maximum stock — the sum insured equals the highest expected stock. Simple, but expensive when stock is low;
  • stock declarations — the policyholder reports actual stock monthly or quarterly and the premium is adjusted;
  • average stock with a premium adjustment at the end of the year.

Beware of underinsurance: if the sum insured is lower than the actual value of the goods on the date of loss, the payment will be reduced proportionally (Article 949 of the Civil Code), unless the contract provides for "first loss" insurance.

What affects the price

  • type of goods: flammability, fragility, attractiveness to thieves;
  • warehouse construction, fire alarm and fire suppression systems;
  • security, video surveillance, access control;
  • storage method: racking, height, packaging;
  • stock turnover and quality of record-keeping;
  • loss history and the size of the deductible.

How to take out a contract

  1. Fill in the application form: warehouse address, description of goods, stock levels, security measures.
  2. Prepare documents: ownership or lease of the warehouse, stock records, fire safety inspection reports.
  3. Agree with the insurer how the sum insured is set and how declarations work.
  4. Study the exclusions, the deductible and the storage requirements.
  5. Sign the contract and pay the premium.

What to do after a loss

  1. Take steps to limit the damage: call the fire brigade, police and emergency services, move undamaged goods.
  2. Notify the insurer immediately, within the period set by the rules.
  3. Do not dispose of damaged goods before they are inspected by the insurer's representative or a surveyor.
  4. Prepare documents: certificates from the authorities, stock records as of the date of the event, primary documents on the value of the goods.
  5. Carry out a stocktake together with the insurer's representative and record the results in a report.

Practical tips

  • Keep stock records so that you can quickly confirm stock levels on the date of an event.
  • Tell the insurer about any change of address, floor space or type of goods.
  • Follow the security and fire safety requirements in the rules — breaching them can lead to a dispute over the claim.
  • If goods are moved often, consider cargo insurance for the time in transit.

More in the commercial property insurance section. Polis Re specialists will request offers from several insurers — send a request.