Insuring your inventory at a 3rd party Warehouse

Jan 03, 2019

While I am not an insurance expert or an attorney lots of customers ask me insurance questions. The primary response I have is learn what and how much your insurance covers, understand the fine print. Then talk with your warehousing companies to understand their insurance and limitations…yes I said limitations.

Rule #1: Insure your inventory while in transit or while being warehoused at a 3rd party location.

Warehouse Liability:

Repeating above…. Insure your product. Warehousing companies do not keep insurance on your inventory. What they do is, only pay for what they become legally liable for and only up to a limited dollar amount which is typically less than market value.

Examples I like to share:

  • Warehouse gets struck by lightning and burns down…. Call your insurance agent.
  • Employee is welding in the warehouse and it catches on fire… the warehouses insurance company will step in and determine legal liability with limitations

Why limitations…

  • Warehouse companies typically don’t vary their storage and handling rates based on the “laid in costs or retail pricing” of your items. The the amount you would be reimbursed is typically a calculation based on monthly storage rate or not to exceed amount.

Summary... know your insurance amounts and read the warehouse contract you signed with your 3rd party warehousing company.

I am happy to answer any questions that you may have.

Robert