25 October 2017
Whether you’re running an import/export business or are making bespoke jewellery pieces in your bedroom, you’ll need to consider how you will protect those goods in storage. As part of your small business operation, you may have contents stored in a commercial storage facility or in a warehouse, or even in a garden shed or cupboard in the laundry. So, what are your options when it comes to insuring those contents? And what about when they’re in transit?
Let’s investigate your insurance options and get you some answers.
Business package insurance
If you have business package insurance in place (usually as part of property insurance) for your business, then it’s possible that items stored in a warehouse or a self-storage facility are covered as part of this insurance type but only if they are temporally removed for up to 90 days and up to a percentage (generally around 20%) of the total sum insured. If contents are permanently removed you will need to contact your insurer to extend cover to incorporate the additional location.
The business package may also provide limited transit cover however separate insurance should be obtained where value of your property is significant.
If you business pack policy in place and you would like cover to extend to any items you have in a storage facility or in transit to or from a storage facility, let your broker or insurer know as soon as possible so that you can take the necessary steps to ensure your items are covered.
You will need to be mindful of any exclusions the policy has. Typical exclusions include:
- Vehicles, watercrafter or motorcycles unless they are considered stock or forklifts used for hauling or lifting goods at your premises.
- Stock that is on consignment to other parties unless it is owned by you or is property you are responsbile for.
- Stock or property that has been removed from the premises for longer than 90 days without prior written consent from your insurer.
Insurance offered by storage facilities
Most storage facilities offer insurance for items stored in their facilities or in transit to or from their facilities.
Storage facilities typically provide insurance against fire, malicious damage, theft as a result of obvious forced entry, earthquake, wind, water damage and leakage, lightning, explosions and impact by a vehicle or aircraft.
Policies will vary depending on each facility. The positive of going the storage facility insurance route is that you will have cover specifically designed for stored items. The negative is that it will be an additional cost on top of other insurances you may have in place (like accidental damage and contents insurance), that may already provide similar cover.
Home and contents insurance
That’s all well and good for goods stored in facilities but what about at home? Quite often, home and contents insurance policies automatically include or can be extended to include items in storage, even if they are items specific to your business.
This may be an attractive insurance option for your stored items due to its cost-effective and simpler nature. However, as with accidental damage insurance, you will need to let your insurer know that you have items in storage that you would like to be insured. There will also be items your insurer may not agree to insure (like money and jewellery), and you will have to confirm with your insurer whether or not items will be covered when they’re in transit and whether or not that insurance is conditional on you notifying them in advance of your stored items being moved to or from the storage facility.
There will most likely also be limitations on how much of your business-related property will be included in your home and contents policy. As always, check with your broker or insurer for more information.
How do I know which insurance option to go with for my stored items?
Your best bet is to chat to a broker or insurance professional who is unaffiliated with a particular insurance company. They will have a better understanding of the specifics of your business and the items you have in storage, and will be able to advise you on which insurance option is the most appropriate for your business.