Self-storage owners are part of a fast-growing and unique industry. Business is on the rise, new facilities are popping up all over, and storage has proven to be a wonderful and profitable venture.
When you have such a large investment, it’s important to understand how to properly protect it. One of the best ways is to ensure you have the right insurance coverages and policies in place—ones that are specific to your business needs.
Self-storage companies have exposures that make them special. The daily tasks an operator considers to be the norm create exactly the kinds of risks that make a facility’s insurance requirements unique. It’s important to review the coverages that are tailored to meet those needs. Let’s look at the general coverages as well as industry-specific policies every storage owner should have to protect his business.
When you think of insurance coverages, the first ones that come to mind are buildings and business-personal property and commercial-business liability. Many view these as the base blocks of a quality policy, as they’re vital in safeguarding your business.
Buildings and business-personal property is an essential coverage for any property-related claims that may arise. Examples include suspicious fires, faulty electrical wiring or fence damage. Look for a policy that includes replacement cost vs. actual cash value, as replacement cost doesn’t take depreciation into consideration when valuing a claim. This makes it quicker and more efficient to indemnify your property and get it back up and running. You may also want to consider blanket coverage for the buildings.
Commercial-business liability covers exposures that arise from bodily injury or property damage due to facility operation. Examples include falls, slips and trips. In the self-storage world, even something like a gate accident can cause bodily or property damage. Having the correct commercial-business liability limit will help you avoid paying for the large claims that can be associated with these incidents.
Another important and common coverage for self-storage is business-income coverage, also known as business-interruption or extra-expense coverage. This is designed to reduce any further risk in the event of a loss. If a facility suffers a covered loss, such as a fire, there can be an indirect loss of income or profit. However, there will still be many ongoing costs the owner has to pay during this time. There may even be some extra expenses endured while getting the business back to normal. This crucial coverage helps you continue operating so you’re able to take care of these costs and move forward.
There are two coverages most know as being specifically designed for self-storage facilities: customer-goods legal liability and sale and disposal liability. Both are valuable and essential.
Customer-goods legal liability provides coverage for claims arising from loss or damage to tenants’ stored property. Storage facilities aren’t responsible for customers’ goods, and this should be clearly stated in the lease. The facility never takes possession of property, merely providing rental space. However, there are certain situations that can still create some liability, and claims may arise against the facility for damaged goods.
Melanie Wichelman is an account executive with Universal Insurance Programs, which has created and provided specialized insurance coverages to the self-storage industry for more than 20 years. For more information, call 800.844.2101.