Commercial warehouses are a vital component of several industries. They're used to store materials, supplies, components, as well as finished products. The owner of a warehouse takes on the responsibility of providing adequate facilities so that their customers can properly store whatever they need to. Most times, commercial warehouse space is shared by a variety of entities, all with unique space needs. Some customers require climate-controlled areas, others need refrigerated or frozen storage, and other customers only need rack space. Regardless of the type of space provided, all warehouses must have proper warehouse insurance.
What Is Warehouse Insurance?
In simple terms, commercial warehouse insurance is a set of coverages that are designed to protect against the loss, damage, and other liabilities. It falls under the category of commercial insurance and the exact types of coverage depend upon the type of warehouse facility, services provided, and whether or not there are employees. However, the most common coverages are as follows:
General Liability Insurance - At a minimum, a warehouse should be covered under a General Liability Insurance policy. This kind of policy protects against a variety of losses and damages, including bodily injury for non-employees, copyright violations, and costs associated with defending against lawsuits. It is not, however, intended to be the sole insurance coverage for a warehouse as it doesn't provide 100% coverage for every potential risk factor.
Commercial Property Insurance - The assets of a warehouse include the buildings, storage racks, refrigeration units, freezers, forklifts and other equipment used within the facility. It also refers to office furniture, office equipment, records, and any other physical assets. Losing any of these important items can result in loss of income, replacement costs, and other expenses. Commercial Property Insurance protects warehouses from these losses so they can continue to provide their services.
Business Owner's Policy - This type of policy combines the benefits of General Liability Insurance and Commercial Property Insurance. It is a good option for a newly formed warehouse business and for very small warehouse businesses that do not own a lot of assets, property, or buildings. As the business grows, a Business Owner's Policy can be expanded to provide the coverage needed.
Commercial Umbrella Insurance - A catastrophic event such as a fire that destroys the warehouse building and its contents can result in severe financial problems. Even if the warehouse is covered by other policies, it may not be enough to cover all of the expenses. A Commercial Umbrella Insurance policy takes over where other policies leave off to provide another level of peace of mind.
Commercial Vehicle Insurance - When a warehouse also provides logistics services such as transporting goods, it is also required to obtain Commercial Vehicle Insurance on all of its vehicles. It covers accidents that cause damage to another person's vehicle or property. It also protects the company from expenses related to injuries or death caused by a driver working in an official capacity.
Worker's Compensation Insurance - Warehouse workers often perform their duties in dangerous conditions, such as working at heights and operating equipment on loading docks. In many states, companies are required to provide their workers with Worker's Compensation Insurance. This provides coverage for medical treatments as well as income replacement if the worker is severely injured.
Is Warehouse Insurance Really Necessary?
No matter what type of business you operate, it's a wise idea to make sure that you have adequate insurance coverage. If a visitor to your warehouse facility is injured, their property is damaged, or some other event happens, you can and will be held liable. Likewise, if one of your workers is in an accident in a company vehicle, or on the job, you'll be held financially responsible. It's always better to be safe than sorry so, yes, Warehouse Insurance is a necessity.
How Much Insurance Does My Warehouse Need?
It really depends upon what type of facility you operate and how it is used. A warehouse that provides storage for flammable or other dangerous materials will obviously need more coverage than one that deals with items that aren't dangerous. Likewise, a warehouse that contains large numbers of refrigerated or frozen units that hold food items may need more insurance than one that stores building materials. Your needs are unique and the only way to know what you need is to speak to a qualified commercial insurance representative.
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