Owners of storage facilities—particularly self-storage facilities—are entrusted with important customer belongings. You promise to keep their items safe, clean, and untouched by the elements. In turn, you need a specialized business insurance package that protects your business, along with special protection for your employees and customers.
Storage facilities are essentially landlords for their customers’ “stuff.” But in most cases, your rental agreement will absolve you from responsibility for damage to your customers’ belongings stored at your facility—unless you are negligent in some way. If improperly maintained wiring leads to a fire, you can be held liable for damage to your customers’ belongings. If improperly maintained plumbing leads to a water or sewage backup, you can be held liable for damage to stored items. Or, if you fail to provide proper security for your premises and customer belongings are stolen, you can be held liable.
In addition, your business property on your premises is always your responsibility. You need to consider how wind, fire, smoke, theft, weather events, and other disruptions can damage your buildings and their contents.
You need self-storage business insurance coverage for your buildings, potential liability claims, office equipment, computers, important papers, and more. And you need coverage that helps you pay your bills and stay in business if you must cease operations to make repairs after some type of covered loss.
Self-storage facility owners may also need additional specialty policies that are designed for the unique needs of your business.
Self-Storage Business Insurance
Talk with your independent insurance agent about the following types of self-storage business insurance.
- Commercial general liability (CGL) insurance offers broad protection for a variety of liability risks that your business is exposed to, from customer slips and falls to claims of advertising liability, slander, libel, and more. Your CGL policy will pay for your legal defense, attorney and court costs, and any settlements or judgments that you must pay, up to your policy limits.
- Business property insurance protects your building(s) and their contents from costs associated with weather, fire, smoke, vandalism, theft, and other types of property damage. Business property insurance not only protects your buildings, but also your own computer systems, office equipment, tools, and more.
- Your business property policy should also include business interruption coverage, which provides income protection if you must temporarily cease operations due to a covered loss (fire, weather, etc.). In addition, you can expand your business income policy to include coverage for breakdowns in utility services (water, electrical) that force you to temporarily cease operations.
Your independent insurance agent can help you determine if you should purchase a business owners policy, which is a small business insurance policy that includes property, liability, and business interruption coverage in one affordable package.
Do You Need Coverage for Your Customers’ Stored Belongings?
There are many circumstances in which you could be deemed negligent and therefore responsible for damage to your customers’ belongings. Insurance companies may offer customer goods legal liability insurance, which is a special policy designed for storage facilities. If customers’ belongings on your property are damaged due to your negligence, this coverage provides reimbursement for their losses.
Unit owners sometimes fall behind in their rent or even completely abandon their property because they cannot make their rental payments. In these cases, you need to have a plan in place for how to dispose of property that is left behind. After all, you can’t keep it forever, with no one paying rent for the space it occupies. Unfortunately, the property owner may sue you after you dispose of the abandoned property. Talk to your independent insurance agent about sale and disposal legal liability coverage for self-storage facility owners. This coverage can protect you if you are sued after disposing of a customer’s abandoned property.
Protection for Your Resident Employees
Self-storage businesses often employ managers who work and live onsite. In these special circumstances, you need certain insurance to protect you and your employees from a variety of situations that can arise. Talk to your agent about:
- Workers’ compensation insurance: protects employees from the costs associated with work-related illnesses and injuries
- Employment practices liability insurance: protects you if you are sued due to claims of discrimination or other employment practices
- Employee theft and crime coverage: protects you if one employee or a group of employees commits theft or fraud
- Employee resident manager’s personal liability: this policy provides personal liability protection for resident employees for non-business related activities on your premises
How To Find the Best Self-Storage Facility Insurance
Many insurance companies have developed special package policies specifically for the needs of self-storage facilities. These packages often encompass many of the types of coverage we have discussed.
Your best bet is to talk to independent insurance agent who can obtain quotes from multiple insurance companies. Just be sure you are comparing apples to apples coverage when making your decision. Some companies may offer different types of coverage or different limits and deductibles. To be sure you are making the best choice, the quotes you receive should be for the same or similar coverage, with similar limits and deductibles. Contact an independent insurance agent to make sure you are informed about your choices.