Insurance Corner 7160

In today's litigious society, recognizing and reducing liability exposures should be a prime concern for every self-storage owner. Courts are getting tough on business owners who allow hazardous conditions to exist, and the dollar amounts juries award to injured parties seem to grow larger every year. It is important to be proactive in reducing potential liability exposures and minimizing the legal and financial hassles of a lawsuit. You'll find some suggestions on how to get started below.

It is also important to secure business-liability insurance to adequately protect yourself. An aggregate limit of $1 million should be considered the minimum amount of coverage for even the smallest facility. (For maximum protection, look for a business-liability policy written on an occurrence basis with no aggregate limit.) Remember to always secure the services of an insurance agent or legal advisor you trust before making any changes to your current policy.

Be Proactive

Perhaps the single most important key to protecting your self-storage facility against liability lawsuits is awareness--of your responsibilities under the law, potential hazards at your facility, and your need to do everything a prudent person would do to prevent accidents. Court decisions can and do favor those who are proactive; and, in the case of a lawsuit, an ounce of prevention is definitely worth a pound of cure.

Reduce Potential Liabilities

One of the the best ways to limit your liability in advance is by identifying and minimizing potential risks. Take a walk around your facility and play a game of "What if..." Try to imagine what could possibly go wrong and what you can do to safeguard against those situations. For example, you may discover a glaring hazard, such as a large pothole outside one of your units, that needs to be blocked off and covered. Or you may chance on a less obvious risk, such as a worn or curled floormat, which was intended to prevent slips and falls but may actually cause them.

A potentially dangerous situation can be created in an instant by a careless employee in the normal course of his work--for example, leaving a wet floor unattended for a few moments while mopping up. Courts can and will hold management responsible for the actions of their employees in these situations. Once again, a proactive response is the key; in this case, it would involve advising tenants of risk by posting a "Caution! Slippery When Wet" sign in the area being cleaned.

There are several other important procedures for reducing liabilities and preventing lawsuits, including conducting accident-training sessions with your employees; holding regular quality- control measures of your facilities and equipment; and keeping documented records of preventive maintenance. Be sure to hire competent employees and regularly monitor their performance. If you are not at the facility on a daily basis, make a practice to drop by periodically without notice to spot unforeseen risks.

A Note on Preventing Door and Gate Accidents

Since accidents involving doors and gates account for a large majority of liability claims, it pays to be extra careful about preventing them. You can reduce your liability substantially when you take reasonable and prudent care to help prevent accidents. Begin by posting "Caution" signs to warn tenants about the possibility of accidents from doors and gates. Keep door and gate mechanisms lubricated and in good working condition. Install metal guards or shields around exposed gears, springs, etc., to prevent the possibility of tenant accidents.

What to Do When an Accident Occurs

No matter how carefully laid your plans may be, accidents can and do occur. If someone on your premises should suffer an injury, take immediate action by first calling an ambulance for the injured person, then documenting all known facts surrounding the accident to accurately reconstruct the events in case of a lawsuit. For safety's sake, be sure to get all of the following information in writing:

It's also a good idea to take a picture or camcorder footage of the site where the accident occurred and try to get a written statement from the injured party if possible. If a trip to the hospital is necessary, call an ambulance--don't use a personal or company vehicle. You may expose yourself to a whole new set of liabilities that are much better avoided.

David Wilhite works for Universal Insurance Facilities Ltd., which offers a complete package of coverages specifically designed to meet the needs of the self-storage industry. For more information on Universal's coverages, or to get a quick, no-obligation quote, call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit www.vpico.com/universal.