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Warehouses & 3PLs · California

Other people's goods, under your roof.

Coverage for public warehouses, third-party logistics (3PL) providers, fulfillment centers, cold storage and distribution.

By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched

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How it works

Your property policy doesn't cover their goods

When you store customers' goods, you can be held responsible if they're damaged or lost through your negligence. Warehouse legal liability covers that responsibility, which your own property policy doesn't. Your warehouse receipts and customer contracts define how much you're liable for.

Forklifts, loading docks and physical work make workers' comp significant, and the building, racking and equipment need property coverage. I place warehouse coverage with markets that write logistics operations near the ports and across California.

Warehouse legal liabilityCustomers' goods damaged through your negligence.
PropertyBuilding or improvements, racking and equipment.
General liabilityVisitors, drivers and your operations.
Workers' compWarehouse staff and forklift operators.

Who I help

Operations that call me

3PL and fulfillment

E-commerce storage and pick-and-pack. See details

Public warehouses

Storage for multiple customers.

Cold storage

Temperature-controlled goods.

Distribution

Cross-docking and deliveries. Trucking insurance

Freight brokers with warehouses

Brokerage plus storage. See details

Building owners

Leasing to logistics tenants. See details

Before you call

What underwriters will ask

Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.

Start the Quote Form

Operations: storage, fulfillment, cross-dock, cold storage.
Goods: commodities and maximum values stored.
Contracts: warehouse receipts and liability limits.
Building: square footage, sprinklers, alarms and security.
Payroll: warehouse staff and forklift operators.
History: current policies and claims.

What the receipt says about your duty

In California, Commercial Code section 7204 sets the duty of care for stored goods. A warehouse is liable for loss of or injury to goods caused by failing to use the care a reasonably careful person would use under similar circumstances. Unless otherwise agreed, it is not liable for damage that care could not have avoided. Outside California, read your state's version of this section.

Limits in the receipt. Section 7204(b) lets the warehouse receipt or storage agreement cap the amount of liability for loss or damage. The cap does not apply to the warehouse's liability for converting the goods to its own use.
Higher declared value. A customer can ask in a record, when signing the storage agreement or within a reasonable time after getting the receipt, for higher liability on some or all of the goods. The warehouse may then charge increased rates based on the higher valuation.
Claim deadlines. Reasonable terms on the time and manner of presenting claims and filing suit can go in the receipt or storage agreement.
Your lien. Section 7209 gives the warehouse a lien on the goods for storage, transportation, insurance, labor and other charges, plus expenses to preserve the goods or sell them as the law allows. It reaches charges on the customer's other goods only if the receipt or agreement says so. The lien is lost on goods the warehouse voluntarily delivers or unjustifiably refuses to deliver.

Send me your receipt form and a sample storage agreement. The cap in them, and any customer requests for a higher valuation, are what I size your warehouse legal liability limit against.

Quota and forklift rules on the warehouse floor

Two California rules shape the warehouse floor, and both come up when we review payroll for workers' comp.

Warehouse quota law (AB 701)

Labor Code sections 2100 through 2112 took effect January 1, 2022, and still read as AB 701 enacted them. They reach employers that control 100 or more nonexempt employees at a single warehouse distribution center, or 1,000 or more at centers across the state, counting staffing-agency workers they control.

Each employee gets a written description of every quota they work under, including the possible adverse action for missing it, at hire.
No quota may prevent meal or rest periods, bathroom use (including reasonable travel time) or compliance with health and safety laws and Cal/OSHA standards.
A current or former employee who believes a quota caused a meal, rest or safety violation can request the quota descriptions and their most recent 90 days of work speed data. The employer has 21 calendar days to provide them. A former employee gets one request.

Forklift training

Cal/OSHA's Title 8 section 3668 requires formal instruction, practical training and an evaluation of each operator's performance in the workplace, with a new evaluation at least once every three years. Refresher training follows unsafe operation, an accident or near miss, a failed evaluation, assignment to a different type of truck, or a workplace change that affects safe operation. The employer certifies each operator's name, the training and evaluation dates, and who trained or evaluated them. Federal OSHA's 29 CFR 1910.178(l) has the same three-year evaluation and certification contents.

High-piled storage and the fire permit

Storage height brings the fire department into your file. The 2025 California Fire Code, which adopts the 2024 International Fire Code with amendments, defines high-piled combustible storage as combustible materials in closely packed piles, on pallets, in racks or on shelves with the top of storage above 12 feet. Where the fire code official requires it, the definition also reaches high-hazard commodities such as rubber tires, Group A plastics, flammable liquids and idle pallets stored above 6 feet.

Permits. Section 105.5.24 requires an operational permit to use a building or part of one with more than 500 square feet of high-piled combustible storage, aisles included. Section 105.6.14 requires a construction permit to install or modify a structure with that much.
Commodity class. Section 3203.1 puts stored goods in Class I, II, III, IV or high hazard. Section 3204.1 designates a storage area by the highest-hazard class stored unless an engineering analysis supports a lower one.
Posted layout. Section 3201.3.2 calls for a floor plan mounted on a wall showing the rack layout, design storage height, commodity types and clearance to the sprinkler deflectors.
Changes. Under section 3205.1, the approved layout is verified every year, and it may not be changed without the fire code official's prior approval.

When I write a warehouse, I ask for that posted layout and the sprinkler design along with the property details. Underwriters compare what is stored, and how high, against the protection the building was designed for.

What to read for in a warehouse policy

Before you sign a storage contract, read these against it and the policy.

Legal liability or regardless of fault. IRMI describes ISO's Legal Liability Coverage Form (CP 00 40) as written around sums you become legally obligated to pay for damage to property in your care, custody or control, with a contractual liability exclusion added by the causes of loss forms. IRMI's point: where a contract makes you responsible for damage regardless of fault, that form is not the right fit, and building or personal property coverage is needed. Read your customer contracts for that wording.
Which causes of loss form is attached. IRMI notes a basic, broad or special causes of loss form goes with the legal liability form, and the basic and broad forms exclude loss caused by vehicles you own or operate in your business. Ask how a truck or forklift hitting a rack would be treated.
Power outages in cold storage. IRMI notes property policies typically treat an off-premises utility interruption as an excluded peril, and lost perishables from lack of refrigeration are a typical result. It names ISO's Utility Services forms, CP 04 17 for direct damage and CP 15 45 for time element, and notes equipment breakdown will not respond to a utility interruption without damage to covered equipment.
Whose goods, whose policy. Ask customers, including food distributors, whether their own property or cargo policy reaches goods in your building, so the contract and both policies line up.

Questions

Warehouse insurance, answered

Does my property policy cover customers' goods?

Usually not. Customers' goods in your care need warehouse legal liability, which covers your legal responsibility for them.

How do warehouse receipts affect coverage?

Receipts and contracts can limit your liability per pound or per item. Coverage should match what your contracts say.

Is cold storage different?

Yes. Spoilage from equipment breakdown needs specific coverage.

What do underwriters rate on?

Goods stored, values, building protection, contracts, payroll and claims history.

Does California's warehouse quota law apply to my company?

It applies if you, directly or through a staffing agency, control 100 or more nonexempt employees at one warehouse distribution center or 1,000 or more at centers across California, counting your commonly controlled group (Labor Code 2100). Covered centers fall under NAICS codes 493110, 423, 424 and 454110; farm product warehousing (493130) is excluded.

How often must forklift operators be evaluated?

At least once every three years under Cal/OSHA Title 8 section 3668 and federal OSHA 29 CFR 1910.178(l). Each operator's certification records the training date, the evaluation date and who did them.

Do I need a fire permit for high-piled storage in California?

Yes, once a building or part of it holds more than 500 square feet of high-piled combustible storage, aisles included. The 2025 California Fire Code calls for an operational permit (section 105.5.24) and a construction permit to install or modify that storage (section 105.6.14).

Do you offer warehouse insurance outside California?

Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.

Official sources

Often placed alongside this

Coverage

Self storage insurance

Property, liability and customer goods coverage for storage facilities.

See coverage Coverage

Commercial property insurance

Buildings, business property and income for commercial owners.

See coverage Coverage

Workers’ comp insurance

Required coverage for California employers.

See coverage

Also covered with this: Apparel manufacturer insurance Flooring store insurance Packaging manufacturer insurance Wholesale distributor insurance Building supply store insurance Moving company insurance Food distributor insurance Manufacturing insurance

By state: Insurance requirements by state

Warehouse insurance

Tell me about your warehouse. I'll shop it.

Your operations, goods stored and square footage are enough to start.

Get a Quote Call (877) 711-4545

Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued. Some policies may be placed with nonadmitted (surplus lines) insurers, which are not members of the California Insurance Guarantee Association (CIGA).

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