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WAREHOUSE INSURANCE
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Insurance

GOODS AT REST.

Reference

Cargo insurance covers goods while they move. It usually stops covering them when they stop, which leaves inventory sitting in a warehouse — often the largest single concentration of value a small brand owns — insured by nobody in particular.

The gap between policies

Cargo covers transit. Property covers a building and usually not somebody else's goods inside it. A 3PL's policy covers the 3PL's legal liability, which is not the same as covering your stock and is frequently capped far below its value.

A warehouse's liability is limited by contract

Storage agreements typically cap liability per unit of weight, which is unrelated to what the goods are worth. A pallet of electronics and a pallet of paper carry the same cap, and the shortfall belongs to the owner.

What to actually check

Four questions decide whether a claim pays anything, and all four are answerable before goods are stored rather than after they are gone. Most operators have never asked any of them of the party currently holding their inventory.

  • Whose policy covers goods at rest, and to what value
  • Whether it is replacement cost or depreciated value
  • What perils are excluded — flood and earthquake commonly are
  • Whether cover continues during a transfer between facilities

Concentration is the real risk

Splitting inventory across locations costs efficiency and buys survivability. A single-site brand losing its warehouse loses the business, not a quarter.

Where to go next
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