Category: Self-Storage

Using Rental Agreements to Limit Liability Exposures Facing Self-Storage Facilities

As with any business, self-storage facilities must take affirmative steps to protect the bottom line. Unfortunately, too many self-storage facilities overlook perhaps the most important and effective step of all–using the rental agreement to limit their liability exposure.

Though it is virtually impossible to completely insulate a business from liability, there are various contractual provisions that are designed to eliminate, or at least limit, the exposures faced by self storage facilities. The challenge is to ensure contractual provisions are drafted in a manner that comports with a facility’s particular situation and business practices, as well as any applicable laws.

Though situational and jurisdictional variations typically undermine the effectiveness of boilerplate or one-size-fits-all templates, self-storage facilities should consider incorporating some or all of the following protections in their rental agreements.

Limitation and Release of Liability

A limitation of liability clause is designed to contractually allocate each party’s risk in reasonable proportion to the benefits derived from the contractual relationship. Without such a clause, a self-storage facility may suffer liabilities that far exceed revenue. The overall purpose of the clause is to clarify and establish that the property is being stored at the sole risk of the tenant.

Depending on the circumstances, different approaches can be taken when drafting a limitation of liability clause. For example, a clause may place a maximum limit on the value of property that a tenant may store in a unit, or it may provide that the parties agree to a fixed value for the property, which can be based on weight, size, or some other factor. Another option is to limit the liability of a self-storage facility to the amount of rent paid by the tenant.

In addition to limiting liability, a rental agreement should stipulate that the tenant has agreed to release the facility from liability in the event of loss or injury. A release provision must be drafted clearly and must state that the release of liability applies to the tenant and to any person authorized to enter the premises by the tenant. To provide the broadest applicability, the release of liability should cover injuries or losses regardless of whom or what is involved.

It is important to understand that the extent to which a party may contractually limit or be released from its liability may be restricted, or otherwise governed, by various state laws. Contractual provisions designed to release a party from the damages caused by its own negligence, or exculpatory clauses, illustrate this point.

Florida and Connecticut courts have held that although exculpatory clauses are disfavored, they will be enforced if properly drafted. An exculpatory clause must clearly and unequivocally state that it releases a party from liability for its own negligence so that an ordinary and knowledgeable party will know what he or she is contracting away. Though some courts state that using the word “negligence” is not necessarily required, it is advisable to do so.

For example, in enforcing an exculpatory clause in a personal injury case, the Supreme Court of Connecticut relied on the fact that the agreement “refers to the negligence of the defendants three times and uses capital letters to emphasize the term “negligence.”

In New York, however, a state statute requires that such a provision be treated differently by the courts when a contract involves real property. Pursuant to this statute, a contractual provision exempting a landlord from liability for the landlord’s negligence is deemed to be void as against public policy. So, even if the lease contained an exculpatory clause addressing the facility’s negligence, it would likely be deemed unenforceable in New York.

The lesson here is that since exculpatory clauses are disfavored, they must be tailored to apply to each specific situation and to comply with any applicable laws. Thus, the use of templates or boilerplate language increases the likelihood that such a clause will be unenforceable.

Indemnification and Hold Harmless

An indemnification provision requires a tenant to compensate the self-storage facility for any damages or losses caused by the tenant which the facility may be required to pay. For example, if a third-party is injured by a hazardous condition created by a tenant, or anyone authorized by the tenant to be on the premises, then the self-storage facility may be liable to that injured party. An indemnification provision would typically require a tenant to compensate the self-storage facility for whatever amount the self-storage facility is liable to the injured party.

A hold harmless provision stipulates that a tenant agrees not to hold the self-storage facility responsible for any loss, injury, or legal liability which is caused by the tenant, or anyone invited on the premises by the tenant, or which is otherwise related to the tenant’s occupancy. If, for example, a tenant is injured while using a dolly that is made available by the self-storage facility, then the hold harmless provision would prevent the tenant from recovering against the facility.

Since indemnification and hold harmless provisions have been described as different sides of the same coin, it is not uncommon for them to be combined into a single contractual provision. Accordingly, they should be drafted with care and in a manner that is consistent with applicable laws.

Insurance

Including a requirement that tenants insure their property accomplishes two goals. First, it provides a tenant with a primary source of compensation in the event of a loss. Second, it places the burden on the tenant to see that he or she is adequately protected in the event of a loss.

An insurance clause within a rental agreement may stipulate that tenants are required to obtain sufficient insurance to cover the value of all the property stored at the self-storage facility. To the extent a tenant fails or is unable to insure his or her property, the tenant would be deemed to have self insured, thereby making the tenant solely responsible for the loss. To increase the likelihood of protection in cases involving high-value property, a rental agreement may require a tenant to show proof of insurance if the value of the tenant’s stored property exceeds a specific amount.

To maximize the protection afforded by an insurance clause, the tenant must agree to waive any subrogation rights, thereby preventing the tenant’s insurance company from coming after the self-storage facility to recover amounts paid out for the tenant’s loss. Whenever a tenant obtains insurance, self-storage facilities should require and confirm that the tenant obtained a waiver of subrogation agreement from its insurance company.

Disclaim Existence of Bailment

Bailment is the temporary placement of control over, or possession of, personal property by one person (the bailor) into the hands of another (the bailee) for a designated purpose upon which the parties have agreed. Under the law of bailment, the bailee owes a duty of care to the bailor with regards to the property, and depending on the type of bailment, the duty of care owed to the bailee can be quite strict.

To avoid being held to a potentially strict standard of care, self-storage facilities should disclaim the existence of a bailment in their rental agreement. Since a bailment is a consensual transaction requiring mutual agreement by the parties, which can be created either expressly or impliedly, a rental agreement should expressly stated that no bailment is created under the agreement.

Additionally, since a general requirement of bailment is that the bailee obtains the right to exclusive use and possession of the property, a rental agreement should state that the self-storage facility does not take care, custody, or control of the tenant’s property. In a typical situation, a tenant should have exclusive control over his or her property, and provided the tenant is not in breach of the agreement, laws, or rules, the facility is not concerned with the kind of property stored by the tenant.

Disclaim Warehouseman Status

A warehouseman, or warehouse, is an individual who is regularly engaged in the business of receiving and storing goods of others in exchange for compensation. As with bailment, carrying the distinction of warehouseman establishes a standard of care that is owed to the owner of the property.

To avoid being held to such a standard of care, a rental agreement should expressly state that the self-storage facility is not a warehouse or a warehouseman engaged in the business of storing goods for hire. A self-storage facility should also refrain from acting in a manner that would be consistent with that of a warehouseman, such as issuing documents of title for the personal property.

In addition to the foregoing clauses, there are various other contractual provisions which are designed to limit the liability exposure faced by a self-storage facility, including clauses which:

  • prohibit the storage of heirlooms or other property with sentimental value;
  • restrict the types of property or uses of storage space to exclude inherently dangerous items or activities;
  • disclaim warranties;
  • clearly establish a facility’s rights in the event of a default;
  • incorporate a facility’s rules and regulations into the rental agreement, including any modifications thereto; and
  • waive the right to a jury trial in the event of a lawsuit.

When a lawsuit results from a tenant’s loss of property or bodily injury, a court will typically start with the rental agreement when determining each party’s respective rights and obligations. Thus, it is important to draft the rental agreement so that it provides the maximum protections allowable under applicable law.

However, since contractual provisions which limit a party’s liability are often the primary focus of litigation, courts will examine them closely before enforcing them against a tenant. Accordingly, it is best for a self-storage facility to retain an experienced attorney who is licensed in a particular jurisdiction to draft or review its rental agreement.

Setnor Byer’s Self-Storage Insurance Program and Risk Management Group work closely with self-storage facilities nationwide to profile risks, compare coverage options, and match our clients with an insurance program that meets their needs. If you would like more information, please contact us.

Self-Storage Practice Pointer: Waivers Under the Servicemembers Civil Relief Act

When it comes to enforcing a storage lien against a delinquent servicemember-tenant, owners and operators of self-storage facilities must make sure they proceed in accordance with the Servicemembers Civil Relief Act (SCRA). The SCRA is a federal law designed “to provide for, strengthen, and expedite the national defense” by temporarily suspending various judicial and administrative proceedings that may adversely affect the civil rights of servicemembers during their military service.

Under the SCRA, “a person holding a lien on the property or effects of a servicemember may not, during any period of military service of the servicemember and for 90 days thereafter, foreclose or enforce any lien on such property or effects without a court order granted before foreclosure or enforcement.”

Simply stated, the SCRA requires a lawsuit and an order from the court before a lien can be enforced against a servicemember. Importantly, this requirement extends 90 days beyond the servicemember’s period of military service. Since this procedure is often different, and more complicated, than the procedure found in various state statutes, it is often beneficial for a self-storage facility to obtain a waiver of rights from servicemember-tenants.

It is important to understand that, although a servicemember may agree to waive the rights or protections afforded by the SCRA, there are strict legal requirements that must be followed for such a waiver of rights to be valid.

To be valid and enforceable against a servicemember, a waiver of rights that applies to the repossession, retention, foreclosure, sale, forfeiture, or taking possession of property that is security for any obligation, including self-storage liens, must meet the following requirements:

The waiver must be in writing.

The waiver must be executed as an instrument separate from the obligation or liability to which it applies. Since this requirement does not allow the waiver to be included within the lease or any other rental agreement, the waiver of rights should be made a separate, standalone document.

The waiver must be executed during or after the servicemember’s period of military service. Requiring a servicemember to add his or her serial number, or other military designation number, to the waiver may serve as preliminary confirmation that this requirement has been satisfied.

The written waiver must specify the legal instrument to which the waiver applies, such as the rental or lease agreement, and if the servicemember is not a party to that instrument, he or she must also be specified.

The written waiver must be in at least 12 point type.

Unless each and every legal requirement is satisfied, a waiver of rights under the SCRA will not be considered legally effective, and any self-storage facility seeking to enforce its lien against a servicemember-tenant will be required to proceed pursuant to the SCRA’s requirements. This is very important because violations of the SCRA may lead to imprisonment, injunctions, and liability for civil money penalties, monetary damages, costs, and attorneys’ fees;

Given the limitations imposed upon self-storage facilities by the SCRA, it is beneficial to obtain a waiver of rights from a servicemember-tenant. However, care must be taken to ensure that the waiver not only satisfies all of the SCRA’s requirements, but that the waiver is properly drafted to permit a self-storage facility to take prompt and appropriate action against a defaulting servicemember. Consequently, it is advisable to seek the assistance of experienced counsel.

If you would like more information about understanding and managing the risks faced by self-storage facilities, please contact us.

SBA Loans: Are They A Revolution In Self-Storage Financing?

As of the release of the Standard Operating Procedures (SOP) 50 10 (5) (C), effective October 01, 2010, if an entity is “primarily engaged” in the provision of mini warehouse / storage services, not the leasing of real estate, it falls under the passive businesses currently eligible. In short, self-storage facilities are now eligible for small business financing from the Small Business Association (SBA).

Why consider SBA financing?

Self-storage owners have good reasons to consider using the SBA program:

Leverage: The SBA allows a business owner to leverage up to 90 percent of the total project cost.

Higher loan amounts: The Obama administration has made the SBA program very attractive, by increasing the SBA loan ceiling to $5 million.

Bundling: The SBA allows owners to bundle project costs, including working capital; furniture, fixtures and equipment; architecture, etc.

Long Term Fixed Rates: The 504 program fixes rates on a portion of the loan for 20 years.

How does the SBA work?

The SBA is a U.S. government-backed agency that guarantees between 75 to 90 percent of the loan amount issued by a commercial bank. The SBA has two programs from which to choose.

SBA–504

  • Two loans; a 1st up to 50 percent of the cost and a 2nd up to 40 percent of costs; totaling 85 to 90 percent of costs.
  • The bank provides the first loan with a 20 to 25 year amortization, fixed for 5 to 10 years at market rate. The prepayment is usually a step down, such as 5,4,3,2,1.
  • The CDC, or Certified Development Corporation, provides the 2nd loan. The CDC is a non-profit organization whose sole purpose is to enhance the economic viability of the local region. This loan is typically fixed for 20 years at low rates. The prepayment penalty is a 10 year declining, i.e. 10,9,8,7,6…..to 1.

The Pros of the SBA-504 include long-term fixed rates; assumability features; and lower cost of money for longer term. The Cons include a hefty prepayment penalty on the 2nd loan; a lot more people have to approve the loan; increased costs because the 2nd is a debenture; and there are VERY FEW banks currently wiling to make the seemingly same senior portion of the 504 loan – especially for self-storage credit.

SBA–7(a)

  • 1 loan that is all funded by the local institution.
  • 25 year fully amortizing loan, based on Prime Rate + Up to 2.75 over.
  • Fully floating, and possible fixed rates.
  • 5,3,1 prepayment penalty.
  • The Pros of the SBA-7(a) include a greater likelihood of approval for self-storage facilities than the SBA-504; only one simple loan to manage; currently lower rates; and ability to get out of the loan after 3 years if things are going great. The Cons include floating rates in an environment where inflation could rise; no cap on the rate; and the requirement for additional collateral for the SBA to latch onto.
  • Succeeding through the SBA Is As Easy As 1, 2,3…
  • To succeed in applying for SBA financing you will need to be flexible, patient and cooperative with your loan originator. Here are three easy steps to ensure your success in procuring an SBA-backed loan:
  • Collaborate: Your SBA consultant will provide a screening test to make a preliminary determination of the likelihood of approval for a SBA loan. The screening test will cover finances, profiling, property and project sizing, individual cash flow underwriting and economic analysis.
  • Collecting: You will receive a very detailed checklist of financial documents which is tailored to you and your situation. From here all you need to do is put your head down and start going down the list.
  • Conceptualization: Now it is the job of the consultant to conceptualize a plan and to execute a proposal. Be prepared to roll up your sleeves and assist in making your dream a reality.
  • The SBA process is simple, but not necessarily easy. As long as you are knowledgeable and prepared, your chances of success are good.
  • Next Steps
  • If you are looking to purchase a loan for, or to refinance a self-storage facility, here are some eligibility
  • Have you made less than $5 million in the last two years and have a net worth of under $15 million?Do you have sufficient outside cash flow to support the debt service 1.2 times?
    1. Do you have a FICO score over 680?
    2. If you can answer in the affirmative to all three, then it is time to take the next steps and to get started.
    3. From “SBA Loans: Are They a Revolution in Self-Storage Financing?” by David Kotter, the Principal Founder of Integrity Capital, LLC. This article is provided courtesy of Setnor Byer Insurance & Risk with the permission of Mini-Storage Messenger Magazine.© MiniCo, Inc. All Rights Reserved. It is not intended for further reproduction/distribution without the exclusive permission of MiniCo, Inc. http://www.ministoragemessenger.com

Controlling Slip-and-Fall Liability: Tips for Self-Storage Facility Operators

Self-storage operators are not immune to slip-and-fall liability. While the volume of foot traffic at a self-storage facility may not reach that of other types of businesses, customers must still enter the premises to store, access and retrieve their property. As a result, an exposure to this type of liability exists, and facility operators must take this risk seriously.

Slips and falls are typically caused by transitory foreign substances, meaning any liquid or solid substance or object that doesn’t belong on the floor. Many believe the hazards caused by these items are more likely to occur in restaurants or grocery stores where spilled foods or beverages create dangerous conditions. However, the likelihood of transitory foreign substances shouldn’t be overlooked in a self-storage setting where customers store and move various items that, if not properly cleaned, can create a dangerous condition in the common areas. Consider these scenarios:

  • A tenant spills an oily substance on the floor when moving automotive parts out of his unit; another tenant then slips on that spot and falls, hurting his back.
  • A tenant’s friend slips in a puddle of water that accumulated in the common area when another tenant propped a door open during a rainstorm and forgot to close it upon leaving.

In light of this risk, self-storage operators must know their duties under the law with regard to protecting those on their premises from hazardous conditions, as well as protecting their business against any potential lawsuits.

Follow the Law

Slip-and-fall cases are traditionally based on the principle that a business owner invites others to enter the premises for the purpose of conducting business with him. Legally speaking, this person is considered an invitee and, under common law, a business owner owes a legal duty to protect him from hazardous conditions.

The general duty can be restated in the following manner: A possessor of land (in this case, a self-storage operator) is subject to liability for physical harm caused to his invitees (tenants and visitors) by a condition on the land only if:

  • He knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk to such invitees.
  • He should expect that they will not discover or realize the danger, or will fail to protect themselves against it.

It’s important to note each state’s common law may have its own peculiarities with respect to defining the precise duty owed by the business owner. Additionally, some state statutes may modify not only respective duties, but methods of proving slip-and-fall cases in court.

For example, a new Florida statute provides that it’s the claimant’s obligation to prove the property owner had knowledge of the hazardous condition. This statute was enacted to legislatively overrule a Florida Supreme Court case that essentially gave claimants the benefit of a rebuttable presumption. As a result, in such jurisdictions, self-storage facilities are no longer on the hot seat in terms of overcoming negative presumptions.

In the context of a transitory foreign substance, such as leaked oil or a puddle of water that has not been cleaned up properly, it’s fair to assume that, in many cases, the substance will create an unreasonable risk to individuals who would not discover it unless brought to their attention, thereby typically satisfying the second element. Similarly, if the self-storage facility failed to clean up the slippery substance, or otherwise failed to warn tenants and visitors of the dangerous condition despite knowing of its existence, it’s fair to say the third element would also be satisfied.

That leaves the first element: Whether the self-storage operator knows of, or by the exercise of reasonable care would discover, the dangerous condition. Although proving knowledge of a hazardous condition can be problematic in some cases, the stickiest issue is usually the determination of whether the self-storage operator should have discovered the dangerous condition before it caused injury to a tenant or visitor. This issue implicates the duty to inspect the premises, which generally requires the business owner to exercise reasonable care to discover dangerous conditions.

Unfortunately, reasonable care is not a fixed concept with defined characteristics. Precisely what’s considered reasonable in any given situation depends on the circumstances, so that behavior constituting reasonable care in one case may be considered negligent in another. It’s this dependence on external factors that precludes a universal, one-size-fits-all approach to meeting one’s duty to exercise reasonable care.

Be Proactive

In the absence of clear-cut standards of behavior, what can a self-storage operator do to defend against slip-and-fall liability? In the context of discovering a hazardous transitory foreign substance, he may exercise reasonable care by inspecting the premises to identify and remedy any dangerous conditions. However, the extent to which the premises must be inspected depends on the particular facts and circumstances.

For example, reasonable care demands more frequent inspections of the common areas during periods of elevated activity. Similarly, areas within the facility that experience increased traffic, such as the office, should also receive increased scrutiny.

There are also other factors that may help define the extent to which the premises must be inspected. Is there a tenant with a history of handling slippery substances or not cleaning up after himself? Is there a particular time of day or year when the facility is more likely to be left in disarray? Is there an area that accumulates water or other transitory foreign substances? Answering these questions could reveal previously unidentified risks.

After considering conditions unique to your facility, including any relevant history and experience, you can make some conclusions on what’s reasonable. For example, would a jury agree it was reasonable to inspect the common areas, such as the office or parking lot, twice a day or twice a month? Was it reasonable to conclude that an area with a history of flooding did not require additional inspections after a rainstorm? Was it reasonable to not require additional inspections of the area next to units occupied by tenants who routinely work on their cars?

While undertaking this secondary level of analysis will not guarantee protection against slip-and-fall liability, it can assist in the development of inspection-related policies and procedures geared toward protecting tenants and guests from any hazardous conditions which should’ve been discovered by exercising reasonable care.

Finally, once you have inspection-related policies and procedures in place, including those recommended by your attorney or required by applicable law, you need to communicate them to your staff. Supervisors must remain attentive to ensure the policies and procedures are strictly followed and documented. Employees should know their failure to follow these policies and procedures could result in disciplinary action.

Though often overlooked, self-storage facilities have a duty to exercise reasonable care to discover dangerous conditions before an injury occurs. It’s in precisely this circumstance that many operators find they’ve failed in their duty and, consequently, land in a courtroom. Those who fail to understand and adhere to this duty before a slip-and-fall occurs, may have to endure the unfortunate experience of having a jury decide what was overlooked afterward.

Minimizing Risk in Self-Storage: Employment Practice Liability Insurance

What the risk-management process lacks in excitement it more than makes up for in importance. Since the absence of an effective risk-management plan can undermine even the most successful business, minimizing or eliminating risk is the cornerstone of any profitable commercial venture.

When developing a risk-management strategy, business owners typically focus on protecting against the most obvious source of potential liability to the exclusion of others. For self-storage facilities, this often means risk-management focus is almost entirely on the physical site as well as the property stored on the premises for others, and any liabilities that may result if such property is lost or damaged. But there is another considerable exposure.

Consider this: An employee in your organization files a discrimination lawsuit alleging she was not promoted because of her gender. You’re confident the promotion went to the better-qualified candidate and have sufficient documentation to support this decision. Still, having to defend your company against her claim in court could be costly; legal fees might seriously deplete your business’s cash reserves, perhaps even lead to bankruptcy.

But you were smart. Two years ago, you purchased an employment practice liability insurance (EPLI) policy, which covers precisely this sort of situation, ensuring your business is protected from a possible financially devastating loss.

Such a scenario is quite possible in today’s increasingly litigious business climate, in which even the most proactive employers can find themselves in violation of one of the many employment laws governing the workplace. In fact, according to the Equal Employment Opportunity Commission (EEOC), the likelihood of experiencing such a scenario is greater now than it has been in the last decade.

In 2007, employees filed almost 83,000 charges with the EEOC, including charges of discrimination on the basis of race, sex, national origin, religion, age, disability and retaliation. This figure represents the first increase in the number of annual charges filed since 2002. Although a precise explanation for the recent surge in employment-related charges may not be available for quite some time, it is possible that the struggling economy may play a significant role.

In any event, the result for business owners is the same: a significantly increased risk of exposure to employment-related liabilities that can push already struggling businesses over the edge. That’s why EPLI has become an almost necessary part of a business’s insurance umbrella.

The Right Protection

EPLI protects employers against workplace claims such as discrimination, wrongful termination and sexual harassment, whether perpetrated by employees or other individuals. These policies can also be extended to provide coverage for acts discriminating against customers or prospective customers (client discrimination).

Generally, a policy covers eligible losses stemming from such causes of action and attorneys’ fees. And the insurer will provide the services of attorneys who specialize in defending against such claims, significantly increasing the likelihood that employers will prevail in the event litigation does occur.

Maybe you think your facility’s commercial general liability (CGL) policy protects you in such situations. Not so. In most cases, CGL policies specifically exclude employment practice claims. CGL policies protect your business against losses resulting in bodily injury or property damage. Employment practice claims generally involve injuries that are mental, emotional and economic in nature and are, therefore, outside the range of protection offered by CGL insurance.

What does an EPLI policy typically cover? The most common situations include:

  • Discrimination and retaliation
  • Sexual and general workplace harassment
  • Negligent hiring
  • Breach of employment contract
  • Wrongful termination, dismissal or discharge
  • Violations of the Family and Medical Leave Act
  • Situations involving defamation, libel and slander
  • Denial of training or deprivation of seniority

Most commonly purchased as a stand-alone policy or an endorsement to a directors and officers policy, an EPLI policy is generally available in claims-made format, meaning the policy will cover only those claims that occur and are reported made during its term.

An EPLI policy also requires the insured give prompt notice to the carrier as soon as the insured becomes aware of facts or circumstances that might give rise to a claim. Most EPLI policies are subject to a single-policy aggregate limit of liability covering both defense and indemnity, meaning the costs of defending against a claim will diminish the amount paid to cover settlements or judgments.

Some carriers will allow an insured to purchase defense as well as policy limits, thereby placing the litigation defense costs outside the amount available for indemnity. Ultimately, the best course of action is to consult your insurance agent to assist you in choosing the policy that suits your business’s needs and provides you with the appropriate level of protection.

As with any liability policy, EPLI may not cover certain risks including:

  • Risks covered by other policies, such as a CGL
  • Intentional, criminal, fraudulent or malicious acts
  • Contractual liability
  • Strikes and lockouts
  • Violations of the Occupational Safety and Health Act

Keep Up Training

Of course, EPLI insurance should be considered only the last line of defense in a healthy business’s battle against workplace liability. Regularly providing your employees with comprehensive training can substantially reduce the risk that they will engage in the sort of illegal or unethical behavior that may lead to litigation.

Unfortunately, during difficult financial times, training is often the first casualty of cost-cutting measures because it is considered a nonessential expense rather than a revenue-generating function. However, since any savings generated by eliminating training may be dwarfed by a single employment-related claim, such a perspective can be costly.

Businesses committed to protecting their profits can provide management and workforce training with minimal expense by providing online training. E-learning offers the information necessary to develop competencies in employment practices that ultimately serve to reduce liabilities. The costs of e-learning are significantly lower than those associated with live training, even though online training is infinitely more effective than standard textbooks.

Moreover, today’s technology allows business owners to easily track their workforce’s training to ensure no employee falls through a training crack. With the option of convenient, affordable online training of employees, the benefits of risk reduction are achieved at a marginal cost.

Also, well-written and properly enforced human resources policies and procedures are essential for keeping your business in compliance with the many and varied regulations covering the workplace, even if it is not in the form of a formal division or department within a self-storage organization. It can be invaluable in reducing the risk of suffering employment-related losses, which often result from a lack of knowledge, attention or both. Ensuring neither circumstance exists within your organization can significantly reduce the likelihood of an employment-related claim.

The good news is that EPLI policies are practical and usually quite affordable. Carefully examine your business’s training programs, employment practices and compliance history to determine its degree of exposure to litigation and weigh these factors against the costs of EPLI. Such a risk inventory may make clear that the cost of an EPLI policy may be a relatively small price to pay when measured against the ruinous financial penalties that can result from employment-practice litigation. Your insurance specialist should be able to assist you in selecting the right coverage for your organization.