Are Goods Stored Outdoors Covered by Property Insurance?

TIS Vietnam Insurance Broker  |  Series: What businesses should know about insurance  |  Published: Oct 14, 2026

Towards the end of the year, many factories in wood and furniture, garments and textiles, packaging and consumer goods enter their peak production season for Tết (Lunar New Year) orders. Raw materials and finished goods build up, the warehouse runs out of space, and part of the stock is moved into the yard under tarpaulins as temporary storage.

It is a common situation. But it is also the moment when a business’s risk changes, and its insurance policy may not yet reflect that change.

What are the risks of storing stock outdoors?

Inside a warehouse, stock has a roof, a dry floor and a safe distance from heat sources. In the yard, those protections are often reduced to a single tarpaulin. Five risks come up most often:

• Heavy rain and strong wind: Tarpaulins are blown off or torn, and rain reaches the stock.
• Flooding and high tides: Water rising from the yard floor soaks the stock, especially timber, paper, fabric and other products that absorb moisture.
• Heat and condensation: Stock sealed under tarpaulins can trap heat and moisture, leading to mould, deformation or loss of quality.
• Fire: Combustible stock stacked close to the workshop, electrical panels or welding and cutting areas increases the risk of fire spreading.
• Collapse and impact: Stock stacked high and poorly secured can topple in strong wind.

Does a Property All Risks (PAR) policy cover stock stored outdoors?

Many businesses hold a Property All Risks (PAR) policy and assume that stock still inside the factory premises is automatically insured. In practice, “all risks” does not mean every location and every cause of loss is covered. Cover also depends on the location, the type of property, the cause of loss and the terms of each policy.

A business should check two points:

• Outdoor storage: Is it within the scope of cover, and does it need to be notified to, or approved in advance by, the insurer?
• Weather: Is damage from storms, rain or flooding excluded, or subject to a separate limit?

Every policy has its own conditions. Stock stored outdoors is not necessarily uninsured, but nor should a business assume that its current policy will protect it automatically.

Is the sum insured still enough when stock peaks?

In the peak season, the value of stock is often much higher than when the insurance was arranged. For example, a factory that normally holds about VND 30 billion of stock may hold VND 50 billion before Tết to meet orders (this is an illustrative example).

If the sum insured stays at the old figure, a business may be paid only proportionally when a loss occurs, depending on the policy conditions, even when the cause of loss is covered. In simple terms, the extra value may not be counted when the claim is paid.

Should you tell your broker and insurer straight away?

Yes. The end of the year is also renewal season, a natural time to review the whole insurance programme. But if the way stock is stored changes significantly, for example when a full warehouse forces a large quantity of stock into the yard, a business should not wait for renewal. The change should be notified to the broker and the insurer straight away.

What should a business do before moving stock outside?

• Insurance: Send your broker the location and photos of the storage area, the type of stock, its expected value and how long it will stay. The broker works with the insurer to clarify the current scope of cover and propose additions if needed. Anything agreed should be confirmed in writing.
• Storage: Raise stock off the ground, secure the covers firmly, avoid condensation and standing water, and make sure water can drain away in heavy rain.
• Fire safety: Do not stack stock near ignition sources, and do not block escape routes, fire-truck access or firefighting equipment. If the storage significantly changes the factory’s fire safety conditions, consult the local fire prevention and rescue police before going ahead.

Please note: An insurer’s agreement to cover the stock does not mean that storing it in the yard meets fire safety requirements.

Three questions to answer before moving stock outside

• Is stock stored outdoors insured, particularly in a storm, flood or fire?
• What is the highest stock value during the Tết season, and is the current sum insured enough?
• Do your broker and insurer know that stock is being moved into the yard, and has everything agreed been confirmed in writing?

If any answer is “not sure”, clarify it before the stock goes outside.

Frequently asked questions (FAQ)

Is stock stored outdoors covered by property insurance?
It may be, but not automatically. It depends on the terms of each policy, in particular any conditions or exclusions for outdoor stock and for causes of loss such as rain, flooding or fire. A business should clarify the position in writing with its broker and insurer before moving stock into the yard.

Does Property All Risks (PAR) insurance cover rain and flood damage?
It depends on the policy terms. Despite the name “all risks”, a PAR policy may carry conditions or exclusions for weather damage, especially for stock stored outdoors. A business should check the storm, rain and flood provisions in its own policy.

What happens if the sum insured is lower than the real value of the stock?
When a loss occurs, a business may be paid only in proportion to the sum insured relative to the actual value of the stock, depending on the policy conditions. It is therefore worth looking at the value of stock at its highest point in the year, not just the average.

Do I need to tell the insurer if stock is only in the yard for a few days?
You should. Even a few days is long enough for a loss to occur, and some policy conditions may require notification or prior approval. A business should give its broker the location, type of stock, value and expected duration of storage.

If the insurer agrees to cover outdoor stock, does the storage meet fire safety requirements?
No. An insurer’s agreement to cover the stock does not mean that storing it in the yard meets fire safety (PCCC) requirements. The business remains responsible for these, and if the storage significantly changes the factory’s fire safety conditions, it should consult the local fire prevention and rescue police.

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* Note: This article is general information and does not replace advice on a specific insurance contract. Cover depends on the terms of the policy and the insurer’s decision.

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