The first three days: seal the scene, report, notify the insurer
Once the fire is out and everyone is accounted for, seal the site: put up a cordon, post someone at the entrance and stop anyone from moving or cleaning anything, your own staff included. A fire scene must wait for the fire bureau's investigators. Their findings and the fire certificate they issue are the common foundation for the insurance claim, the tax filing and any finding of liability. A theft scene must wait for the police; locks, windows, CCTV footage and entry logs are all evidence. Until the professionals arrive, photograph and film from every angle, note the time, the weather and who was present, and copy the CCTV footage to separate storage so that it is not overwritten.
Next, report and collect paper. For a fire, report to the fire station with jurisdiction and apply for the fire certificate. For a theft, report to the local police station and ask for the record of your report; the practical steps are in how to file a police report. On the same day, notify your insurer or broker in writing of the date, place and outline of the loss and ask for a surveyor to be appointed. Policies usually require notice within a short period after the loss and a formal proof of loss within a further period, both set by the policy wording. Finally, limit the damage: move undamaged goods to a safe place, cover wet stock, secure doors and windows temporarily and add guards, keeping receipts for every expense. Do not discard or sell damaged stock before the surveyor has seen it.
Proving the loss: book stock, physical count and documents must agree
The insurer and the tax authority ask the same question: what exactly was in the warehouse at the moment of the loss, what was it worth, and how do you prove it. The answer is three sets of evidence that support each other. The first is book stock: export the latest inventory listing before the event from the warehouse system or the accounts, add the receiving and dispatch records up to the day of the loss, and derive the theoretical stock. The second is a physical count: with the surveyor or investigators present, count what remains and sort it into sound, repairable or saleable at a discount, and total loss, photographing each line. The third is value: purchase invoices, import entries and proof of payment that establish cost for each category. Theoretical stock less what remains gives the quantity lost, multiplied by a documented cost.
The usual difficulties are records that never matched the shelves, and key documents that were kept in the building that burned. Obtain copies quickly from suppliers, banks, the customs broker and your accountant, and export anything held in cloud storage. If other people's goods were in the warehouse, because you store for customers or because you are a customer in a shared facility, prepare separate schedules. Do not count their goods as your loss, and do not overlook what you may owe them. After a theft, look inward as well: access rights, key and door records, and recent leavers. Where insiders may be involved, follow the sequence in what to do when an employee steals.
Who pays: your own warehouse, a leased one and a third-party one are different cases
Liability follows custody, so first identify your position: you lease and run the warehouse yourself, you have handed the goods to a third-party operator, or you are the operator holding goods for others. If you lease and run it, the risk to the stock is in principle yours and your own property insurance is the main protection. A landlord's policy normally covers the building and not the tenant's goods. You have a basis to claim against the landlord only if the fire or theft resulted from the landlord's fault, such as wiring left unrepaired despite repeated requests, fire equipment that did not work or promised security that was never provided, and that depends on the lease and on your evidence. If a neighbour's fire spread to your unit, the claim lies against the neighbour at fault or its insurer.
Where goods are with a third-party warehouse, the operator owes a duty of proper care as custodian, and for loss or theft during its custody it is generally for the operator to show that it was not negligent. Nearly every storage contract, however, sets a limit of liability and a list of exclusions; some limits are very low relative to value, and some contracts simply require the owner to insure. Find the contract at once and read three clauses, the period of responsibility, the compensation basis and the notice deadline, and claim in writing within that deadline. For choosing operators and contract points see using third-party logistics and choosing a warehouse in the Philippines. If you are the operator, notify your liability insurer and every cargo owner. Damage during carriage follows different rules, covered in claiming for cargo damaged in transit.
The insurance claim: cooperate, do not inflate, and beware of underinsurance
The principles at claim stage are cooperation, accuracy and keeping copies. The surveyor will ask to see the site, the books, purchase and sales documents, the fire bureau or police report, the lease and any storage contract. Supply each item on the list, and where you cannot, explain why and offer alternative evidence. Be prepared for three things. First, underinsurance leads to proportionate payment: if the sum insured was well below the stock actually held, even a partial loss is paid only in proportion. Second, policies contain warranties, for instance that fire equipment is kept in working order, flammable goods are stored as required, the premises are attended at night and CCTV is operating. Failure to meet them at the time of loss can be a ground for refusal. Third, theft cover often requires visible signs of forcible entry, while theft by staff and unexplained disappearance are commonly excluded.
Never inflate the stock or fabricate documents to increase a claim. Insurance fraud can void the entire claim and carries criminal exposure. If you disagree with the surveyor's findings, respond in writing point by point with further evidence. If no agreement is reached, the policy will contain a dispute clause, and you may also ask about the complaint channel of the insurance regulator. Where cash is tight before payment, ask whether the insurer will make an interim payment on the undisputed part. Dispose of salvage only with the insurer's consent. If the warehouse also held goods pledged to a bank or supplied under retention of title, the proceeds may belong to someone else, so check that too.
The tax filing, and what to tell customers and suppliers
Stock lost to fire, theft or other casualty can be claimed as a deductible loss only if a sworn declaration of loss with supporting documents is filed with the tax authority within its prescribed period. That period runs from the date of the event and is not long; follow the rules currently in force. The declaration normally describes the event, lists the assets lost with their cost, attaches the fire bureau or police report and states the position on insurance. Amounts recovered from insurance cannot be deducted again. How to treat input tax already claimed on the lost goods, and how to report and rebuild books and invoices that were destroyed, should be taken up by your accountant in the same week. Destroyed records that were never reported are very hard to explain in a later audit.
External communication also belongs in the first days. Send affected customers a factual written notice that does not shift blame: what happened, which orders are affected, when supply will resume or what substitute you propose, and who to contact. If the contract has a force majeure or delay clause, give notice in the manner and within the time it requires, since failure to notify may forfeit the right to rely on it. Inform suppliers and banks too, particularly where you buy on credit, have pledged stock or use a credit line. If the warehouse must stand idle and staff are to be laid off temporarily or reassigned, follow labour law procedure. Before the premises reopen, fire and business permits may need fresh inspection; see the fire safety inspection certificate and failing a fire inspection.
Five things to do before anything happens, and what Yixing can do
Preventing warehouse losses is inexpensive compared with not doing so. First, let the sum insured follow the stock actually held, raise it before peak-season build-up and confirm whether cover is on replacement cost or purchase cost. Second, keep inventory records, purchase invoices and books backed up away from the warehouse. Third, reconcile books and shelves every quarter. Fourth, inspect fire equipment, wiring, CCTV and access control on schedule and keep the records, which serve both as prevention and as evidence that policy warranties were met. Fifth, write responsibility, liability limits and insurance arrangements clearly into contracts with warehouse operators and landlords. If you use a security agency, verify its licence and the guards' credentials; see security agency compliance. Flammable, hazardous and temperature-controlled goods have their own storage rules and should not be mixed with general cargo.
Yixing Travel Consultancy (SEC Registration No. CS202009551, Bureau of Immigration Accredited Agency No. CA-202624381-1) offers compliance retainer services for foreign-owned companies in the Philippines: a calendar for permits and annual fire inspection, a review of storage and lease terms, preparation and follow-up of incident reports, loss schedules and tax filing documents after a loss, and introductions to accountants, surveyors and licensed counsel. We are not an insurer or a law firm and we do not promise any claim or recovery outcome. If your warehouse was hit last night, do not clear the site yet. Find the policy, the lease or storage contract and the latest stock listing, and send the reports and the insurance notice first. For your specific case consult a licensed lawyer; this article is not legal advice.
Frequently Asked Questions
Can I clean up the warehouse straight after a fire?
Where do I report a warehouse theft and what document should I obtain?
My goods were burned or stolen in a third-party warehouse. Must the operator pay?
Will the landlord's insurance cover my stock after a fire in a leased warehouse?
The insurer says I was underinsured and will pay proportionately. What does that mean?
Is the inventory loss deductible for tax?
Our books and invoices burned as well. What now?
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