Global supply chains are constantly changing. While much focus is often on cargo in transit, some of the most significant risks arise once goods have stopped moving. Warehouses, logistics hubs, tank farms and third-party storage facilities now hold increasing volumes of stock for longer periods, creating concentrated risk at fixed locations.
To explore how these exposures are changing and why insurers and brokers must pay attention to these shifts, we spoke with Lee Dumford, Global Head of Risk Control at Securus Risk Advisors, about the current realities of stock storage risk.
Understanding Static Risk in a Changing Market
At Securus Risk Advisors, the focus from a stock storage perspective is on understanding and controlling static risk - the exposures associated with goods stored over time rather than those moved between locations. This includes supporting insurers and brokers through:
The core objective is to understand how stock is stored, protected, managed and monitored, and whether controls remain adequate as values and operational pressures increase.
Why Stock Storage Surveys Are Important
Stock storage surveys offer essential insights into loss severity exposure, rather than focusing solely on frequency. While daily incidents may be relatively infrequent, a single major event at a high-value storage site can lead to disproportionate losses. Surveys help to identify:
For brokers, surveys also support stronger risk presentation, more informed discussions with underwriters and clearer justification of terms.
The Impact of Supply Chain Disruption
Lee believes recent geopolitical events and ongoing supply chain disruptions have materially changed storage risk profiles.
He said, “Goods that were previously transient are now retained for longer periods, often in facilities not designed for sustained high-value storage.” Lee warned, “This increases exposure to fire, contamination, theft and catastrophic loss and has made independent risk assessment more critical.”
Securus Risk Advisors is currently seeing increased exposure across:
Bulk liquids and fuels in static storage
Consumer goods in third-party warehouses
High-value manufactured components
Temperature-sensitive products
The Greatest Type of Risk
Some categories of stock inherently carry a higher risk of severe loss than others. These include flammable or hazardous materials, liquids stored in bulk, high-value goods with limited fire separation and temperature-controlled stock that relies on mechanical systems. These categories have elevated severity profiles, where a single incident can lead to total loss.
Lee has noticed recent changes in how stock is managed and stored. He explained, “Higher stock densities, increased vertical storage and greater reliance on third-party logistics providers have become more common. In many cases, infrastructure and protection measures have not evolved at the same pace as stock values, widening the protection gap.”
Securus Risk Advisors supports insurers across the UK, Europe, North America, Mexico, Asia and Australia, with a particular focus on large distribution centres, bonded warehouses, manufacturing storage and mixed-occupancy logistics parks.
The greatest exposure is typically seen at high-volume distribution hubs and third-party storage facilities, where stock from multiple clients accumulates within a single space, sometimes without full appreciation of total insured values. Lee said:
“Risk variability is largely driven by construction standards, fire protection infrastructure, management competence and regulatory oversight. Facilities with poor compartmentation, limited detection or weak housekeeping controls consistently present higher severity potential regardless of location.”
The Most Common Causes of Stock Loss
Significant stock losses are most frequently caused by fire, contamination, water damage from suppression or flooding and theft. Losses are exacerbated by poor segregation, limited detection, poor maintenance of protection systems and delayed emergency responses.
In a recent assessment, a warehouse had seen its stock level double due to supply chain delays, while fire detection and compartmentation remained unchanged. Early intervention enables insurers and operators to implement stock caps and improve segregation controls, helping avoid what could have become a major accumulation loss.
Emerging Risk Trends
Emerging trends in stock storage risk are being driven by rising accumulation levels, higher value inventories and the increasing use of retrofitted warehouses that were never designed for today’s demands. At the same time, many businesses are relying on single facilities to service multiple supply chains, creating concentrated exposures that can escalate quickly when something goes wrong.
Climate and environmental pressures are also reshaping the risk landscape. Higher temperatures, flooding and more frequent extreme weather events are increasing the likelihood of damage in poorly protected or poorly located sites, particularly where drainage, building resilience or monitoring is lacking.
While technology is improving visibility around stock levels, conditions and system performance, it only delivers meaningful protection when paired with strong management controls and a clear understanding of how risks accumulate.
Risk Management and Insurer Value
Common mistakes in stock storage risk often stem from underestimating how quickly accumulation can build and failing to reassess protection as volumes grow. Many operators still use outdated risk assessments that do not accurately reflect how their sites operate today, creating discrepancies between perceived and actual exposure.
So, what are some practical ways to minimise the risk of stock loss? Effective measures include:
Clear stock value caps
Appropriate compartmentation
Well‑maintained detection and suppression systems
High housekeeping standards
Formal change management processes when storage arrangements evolve
Lee says, “Stock storage surveys add further value by giving insurers forward‑looking insight, strengthening underwriting strategy, reducing the likelihood of catastrophic loss and ensuring risk acceptance aligns with real site conditions, helping underwriters understand exactly what they are insuring, not just what is written on a submission.”
A warehouse may seem low risk due to infrequent losses. However, if protection standards are not updated to match accumulation values, a single event can lead to significant consequences.
Early, independent assessment remains one of the most effective tools for understanding true exposure, supporting underwriting confidence and preventing catastrophic loss.
Speak to Securus Risk Advisors today to discuss storage surveys, accumulation reviews or static risk exposure across your portfolio.
