Warehouse insurance

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Warehouses are the heart of businesses like manufacturers, distributors, wholesalers, and more. They are where the products are kept, registered, and shipped around.

In some industries, like the beverage business, warehouses, and distribution processes are required by law. To say that a warehouse is a big business investment would be a vast understatement.

There’s a lot to consider when it comes to damage and protection –workers, inventory, property, products, equipment, vehicles, and more. Physical, financial, and business damage are all things to consider. Warehouse insurance can seem complicated and expensive at first glance.

Insurance Navy is here to help make warehouse insurance policies easy and affordable.

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Why do you need Warehouse insurance coverage for your business?

Those shelves upon shelves of products meant for distribution, the space they are kept in, the equipment used to manage them, and the workers managing them will simply need insurance. A claim resulting from damage or injury from any of these areas will be any warehouse’s last.

So when it comes to a good Warehouse insurance policy, where exactly do you start?

Well, first consider Murphy’s law when running a warehouse by thinking about everything that can and will go wrong during business hours.

These are the following hazards and damages:

Damage to the property, products, and equipment within the warehouse and on business grounds due to criminal or weather hazards
Injuries and damages to third parties or individuals visiting the warehouse, along with damages that they unintentionally cause
Stolen property and products as the result of thieves breaking in
Damages and accidents involving a warehouse’s fleet of vehicles like trucks and vans
Damages and injuries involving warehouse workers during business hours
Equipment like forklifts breaking down or getting damaged and requiring repairs and replacements
Products and shipments arriving damaged to the warehouse during transit
The computer system that the warehouse uses to track shipments, inventories, and distribution is cyber-attacked, and data is breached
A product in distribution can be recalled and cost the warehouse and company a loss of income

These are just a few examples of what Warehouse insurance can protect your business from.

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How does Warehouse insurance cost?

In any case of insurance, it’s difficult to find an average since the cost of coverage is a highly personal thing.

When it comes to Warehouse insurance, it’s been reported that a square foot costs anywhere from $0.50 to $2.00 to insure with property damage coverage. General liability has been reported to cost at least $30 a month for warehouses, and that’s a very loose average. As you can infer, the cost of insurance is an accumulation of all the coverage that the policyholder desires.

Because of this, warehouses need to pay special attention to their budgets. The good news is that bundling coverage usually saves on premiums which is something that they tend to do with all the aforementioned damages.

With all the property kept within the warehouse, assets like vehicles, and the well-being of the employees – there are more than some opportunities for saving.

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Types of Warehouse insurance coverage

There is no specific type of warehouse insurance; rather, it’s just used to describe the entire policy for the warehouses in question. Warehouse insurance is a collection of different types of insurance meant for commercial properties and workers.

The following are some of the most common and essential types of coverage warehouse owners and managers elect for their policies.

Commercial property insurance

First and foremost when it comes to warehouse insurance policies is the warehouses themselves. As commercial property used for business, they are subject to all the usual protection that commercial property insurance regularly offers.

It’s more than just insuring the warehouse; the wares and property inside are also accounted for. This includes product, inventory, storage, and any equipment that assists with the organization and cataloging of them, like a forklift or physical computer with the latest edition of Windows installed on it.

This coverage fits any kind of warehouse like a glove. This can be those with automotive products, general goods, and even food kept in industrial freezers and refrigerators. General damage caused to the building and the property inside is caused by most weather conditions and criminal factors like robberies and vandalism.

Even furniture and other supplies kept in offices that connect to a warehouse are included in the policy because it’s considered part of the warehouse. Even the machines used to print shipping tags are covered.

This is the most important insurance coverage one would get for a warehouse and functions as the stepping stone of the policy.

General liability insurance

There are several liability damages and claims that can occur in a warehouse setting. Warehouse inspections and tours to see if they are up to regulation or just a regular business visit by a third party can go awry if someone is injured or their property is damaged by a worker.

General liability insurance is imperative in making sure that medical fees, replacement costs, and even lawsuits won’t put a business in the red or even out of service.

In a warehouse setting, liability damage caused by products and inventory is a readily available add-on. Advertising and copyright violations within are also covered by general liability for commercial establishments.

There are also plenty of opportunities to extend liability coverage to more specific things like product recalls, professional services, and more. How much liability coverage a warehouse will need depends on its size and scope.

Workers compensation insurance

Warehouse workers and employees are seldom sitting down at a desk throughout the day. They may be operating machinery to organize inventory or going through products that can cause them injuries or illness.

Workers’ compensation insurance is often required for all these reasons and more. This would be the general liability coverage when it comes to anyone on the company’s dime. If an employee is injured on the job, any resulting medical, legal, and lost wages expenses are covered.

Warehouses simply need people power to organize and process orders and play an integral part in the business. Forklift drivers often have to adhere to safety regulations and have certification to operate beforehand.

Workers’ compensation has its own insurance policy separate from the overall warehouse policy, but both go hand-in-hand with each other in a coverage package. Again, this coverage will more often than not be required by law.

Commercial car insurance

Several warehouses take the distribution job upon themselves with a fleet of delivery trucks or vans at the ready on a daily basis. Warehouses may also receive and send orders amongst themselves as well. Another heavily required insurance is car insurance, and when it comes to commercial vehicles, it’s no exception.

As with standard car insurance, all the full and basic auto coverages are available for a commercial auto policy. Even trailers and personal vehicles occasionally used for business can have coverage extended to them. Commercial non-owners car insurance is also an option.

Basic commercial car insurance is the required portion that will insure any injuries or damage that a warehouse driver causes to another while on a delivery or distribution run.

Full and optional commercial car insurance accounts for damages and injuries done to employees and vehicles in an at-fault accident while it’s parked and not in use. Additional coverage like roadside assistance insurance and rental vehicle reimbursement is also available for such cases.

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Additional types of Warehouse insurance

The aforementioned coverages are what warehouses should get for all the broad and common risks and damages that can occur in their day-to-day operations. Still, they don’t cover every little thing that can happen.

The following are some handy coverages that are never required but can be beneficial for most warehouses.

Transportation and Inland marine insurance

There is always the chance of products and inventory getting to the warehouse broken or not in the condition they were promised. Transportation coverage, or inland marine insurance as it’s sometimes called, insures products while they are in transit and get damaged in the process. This can be when they travel by road, air, or rail.

Additional coverage may be necessary if the products and shipments come from overseas. The alcoholic beverage industry thrives with this coverage considering all the glass bottles that have to be moved.

Business income insurance

This coverage is also known as business interruption insurance. Warehouses are one of the businesses that can’t afford to shutter their doors for even a little bit. Shipments and orders won’t be met, and inventory may fall behind, resulting in some serious financial setbacks.

Business income coverage will usually insure a business if damages force it to close for a period of time and miss the expected income. This is known as actual loss sustained basis and why business income insurance was created.

Product recall insurance

As previously mentioned, a product can be recalled by its maker even after the shipments have gone out and been paid for by warehouses. Having recalled products that can’t be sold is a hazard on its own, especially if it was a big shipment. That’s why having product recall coverage in a warehouse policy is always a good idea.

The cost to replace all lemon products with the improved ones is covered along with expenses related to advertising the product in question. Literally, every financial damage that they can cause is covered.

Cyber liability insurance

Nowadays, warehouse records are kept as digital files in a computer system or database that is constantly updated with sensitive product and customer information regarding orders. These systems are subject to cyber attackers as they attempt to steal sensitive information and documents.

Cyber liability insurance comes in to cover the recovery effort and any damages as a result. Sensitive information regarding vendors and distributors is also at risk during cyber attacks.

It may be in a warehouse’s best interest to at least consider this coverage, even if the computer system isn’t used a whole lot.

Equipment breakdown coverage

Forklifts, trash compactors, lifts, shelves, and even package labeling machines all have irreplaceable roles to play in a warehouse. If something breaks or is damaged, that not only can set a warehouse back with the workload but also costs them to fix and even more to replace.

Equipment breakdown insurance comes to the rescue to cover these costs. Warehouses dealing with perishable goods and food in refrigerators and freezers that break down can especially benefit from this coverage.

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