Industrial & Warehouse Property Insurance
Fire is a major underwriting consideration for industrial and warehouse property. The buildings are large, open and usually steel framed, the contents burn, and once a fire is established in a warehouse it can result in extensive or total loss rather than a repairable one.
What the unit is built from matters as much as what is stored in it. Composite panels with a combustible core behave very differently in a fire from mineral wool cored panels, and since several large industrial losses insurers have asked about panel construction on every enquiry.
On a multi let estate the risk profile of the occupiers can materially affect the overall building risk. Units are often let to different trades with a shared roof and shared compartment lines, so one tenant's process can determine the terms for the whole terrace.
We can advise owners of single units, terraces and multi let industrial estates on insuring the buildings, including where occupancy, construction or fire protection affects insurer appetite.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Fire loading from what is stored
Plastics, foam, packaging, aerosols, timber and paper all burn hard and fast in racking. Stack height, aisle width and whether goods are stored against walls all affect how a fire develops, and insurers ask about them because they determine whether a sprinkler system can cope.
Composite panel construction
Panels with polystyrene or polyurethane cores contribute to a fire rather than resisting it, and they spread it through wall and roof voids past compartment lines. Documented panel type is now one of the first questions on any industrial enquiry.
Battery charging and hot work
Forklift charging areas, lithium battery storage and any welding or cutting inside a unit are common ignition sources. Charging left unattended overnight in a corner of a warehouse is the classic cause of an out of hours industrial fire.
One tenant's trade on a shared estate
A terrace of units under a single roof shares its fate. Waste handling, recycling, tyre storage, furniture manufacture or spraying in one unit will drive the terms for every unit alongside it, whatever the neighbours are doing.
Theft of metal and plant from a quiet site
Industrial estates are deserted at night and hold cable, catalytic converters, plant and stock. Roof mounted copper, external cabling and unattended yards are targeted, and roof damage during a metal theft frequently causes far more water damage than the value taken.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure, cladding, roof, yards and landlord's fixtures on a reinstatement basis. Debris removal is a meaningful figure on this class because clearing a burnt steel frame and its contents is expensive in itself.
- Steel frame, cladding and roof
- Yards, hardstanding and fencing
- Debris removal and professional fees
- Compliance with current building regulations
Property owners liability
Injury and damage arising from the building and the parts of the estate the owner retains, including roads, yards, lighting and shared service areas where vehicles and pedestrians mix.
- Estate roads, yards and lighting
- Injury to visiting drivers and contractors
- Limits typically £5m or £10m
- Damage to neighbouring premises
Loss of rent
Rent lost while units cannot be occupied. Industrial reinstatement can be quicker than a city centre rebuild, but a total loss still means demolition, clearance and a full rebuild, so a twelve month period is rarely enough.
- Rent across affected units
- Indemnity period of 24 or 36 months
- Allows for clearance and rebuild
- Service charge income where insured
Terrorism
Excluded as standard and bought back where required, commonly by a lender. On larger distribution assets it is usually taken as a matter of course given the sums insured involved.
- Excluded from the standard policy
- Often required by lenders
- Rated on location and sum insured
- Recovered through the service charge
Engineering inspection
Cranes, hoists, lifting equipment, pressure vessels and compressors on site require statutory thorough examination. Whether the duty is the owner's or the tenant's depends on who controls the plant under the lease.
- Lifting equipment and cranes
- Pressure vessels and compressors
- Duty follows control under the lease
- Separate from damage cover
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- The trade of each occupier and what is actually stored or processed inside
- Wall and roof panel construction, and the core material where composite
- Sprinkler protection, its design standard, and whether it suits the goods stored
- Maximum stack height, racking layout and whether goods are stored against walls
- Battery charging arrangements and any lithium battery storage
- Hot work controls, and whether any welding or cutting is carried out
- Site security: fencing, gates, lighting, CCTV and whether alarms are monitored
- Number of units, whether they share a roof, and where the compartment lines fall
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Occupancy and what burns
One of the main factors insurers consider. Light assembly and general storage of non combustible goods rate well; plastics, foam, timber, recycling and waste move both the rate and the availability of cover sharply.
Panel construction
Documented mineral wool cored panels rate materially better than combustible cored ones, and on some occupancies the difference decides whether the building is insurable in the standard market at all.
Sprinklers
A sprinkler system designed for the goods stored is the strongest single improvement available on this class, and on larger warehouses it is effectively a precondition of competitive terms rather than a discount.
Estate layout and separation
Detached units and proper compartmentation limit how far one fire can travel. A terrace under a continuous roof void is rated on the assumption that a fire in one unit reaches the others.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Undisclosed storage or process
Waste, recycling, tyres, foam, aerosols and furniture are all trades insurers price specifically. Where a unit is being used for one of them and the insurer was told something else, the cover written does not match the risk that exists.
Sprinkler conditions not met
Where terms depend on a sprinkler system, the conditions usually cover maintenance, water supply and not storing above the design height. Racking goods above the system's design height is a common and serious breach.
Tenant's stock, plant and racking
The owner's policy covers the building. Stock, machinery, racking and fit out belong to the occupier, and on this class the contents value frequently exceeds the building value several times over.
Damage from gradual causes
Corroded cladding, failing roof sheets and blocked gutters are maintenance. Water ingress through an end of life roof is one of the more common declined claims on older industrial stock.
Common questions
Why do insurers ask so much about cladding panels?
Because the core material decides how a fire behaves. Panels with a combustible core spread fire through wall and roof voids past compartment lines, which turns a contained incident into a total loss. If you have documentation confirming the panel type, it is worth producing it at quotation rather than waiting to be asked.
Do I need sprinklers?
Not as a legal requirement in most cases, but on a warehouse of any size they largely determine what terms are available. Where a system exists, make sure the goods stored are within the design it was built for: storing higher than the design height can breach the condition the terms rest on.
One tenant on my estate handles waste. Does that affect the other units?
Yes, particularly where units share a roof or a compartment. Insurers rate a terrace on the assumption fire can travel, so the worst occupancy influences the terms for the whole building, not just that unit.
Who insures the racking?
Normally the tenant, as part of their contents and plant. It matters because racking layout and height affect the building's fire risk, so the insurer will ask about something you do not insure and may impose conditions about it.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.