When considering insurance, owners and operators of self storage facilities often focus on traditional coverages despite facing risks that are unique to the self storage industry. As a result, some of the biggest risks faced by self storage facilities remain uninsured.
To avoid this problem, owners and operators should consider obtaining specialized coverages designed to protect against the risks that come with operating a self storage facility.
Sale and Disposal Liability Coverage
Sale and Disposal Liability Coverage will pay for damages caused by a self storage facility’s sale and disposal operations involving the lock-out, sale, removal or disposition of a customer’s property. Even if everything was done by the book, the defense coverage can be used to respond to frivolous lawsuits filed by tenants.
Customers’ Goods Legal Liability Coverage
Owners and operators of self storage facilities are usually blamed when a tenant’s property is damaged. Customers’ Goods Legal Liability Coverage will pay for damages to their property that occurs at the self storage facility and will cover defense costs if a lawsuit is filed.
Business Interruption Coverage
A temporary closure due to a loss does not mean that business expenses stop. Business Interruption Coverage can prevent a temporary shutdown from becoming permanent by covering reductions in net income and providing the funds needed to pay normal operating expenses. Extra expense coverage is also available to cover expenses over and above normal operating costs, such as temporary relocation costs.
Ordinance and Law Coverage
Building codes are regularly changed to improve a structure’s resistance to various risks. Ordinance and Law Coverage covers the extra expense of rebuilding to comply with updated building codes, which, in the case of older structures, can be very expensive.
Employee Dishonesty Coverage
It is estimated that employee fraud costs the average American business six percent of its total annual revenue. Employee Dishonesty Coverage, which is also known as Employee Theft Coverage, can protect a self storage facility from financial loss due to the fraudulent activities of an employee or group of employees, including crimes involving embezzlement and internal theft.
Hired and Non-Owned Automobile Coverage
Owners and operators commonly overlook automobile insurance simply because the self storage facility does not own a vehicle. But, what if the self storage facility rents a truck to pick up equipment or sends an employee on a business errand in the employee’s own car? Hired and Non-Owned Automobile Coverage applies to bodily injury or property damage arising out of the business use of a hired or non-owned automobile.
Equipment Breakdown Coverage
Equipment Breakdown Coverage a/k/a Boiler and Machinery Coverage pays the cost of repairing and replacing damaged equipment covered under the policy. Any resulting loss in business income, as well as additional costs incurred in trying to restore operations quickly, may also be covered under such a policy.
When shopping for these coverages, owners and operators of self storage facilities should consult an insurance agent with an established history of experience and expertise in the field of insuring self storage facilities. Otherwise a self storage facility may be left with costly duplicate coverage or dangerous gaps in coverage.
If you would like more information about how Setnor Byer Insurance & Risk’s Self Storage Insurance Program can help protect your facility, please contact us.