Dealing With Hazardous Materials

Amy Brown Comments
Posted in Articles, Insurance
Print

The discovery of hazardous materials in a self-storage unit can happen to even the most cautious storage operator. You might come into work one day and discover gas has spilled onto your property from a nearby construction site. Perhaps you find an abandoned unit filled with old tires and cans of oil or, even worse, toxic chemicals. Your local health department requires you to hire a certified remediation contractor to clean up the contamination; but since the tenant cannot be found, you get to foot the entire bill.

Cases like these are typical, and self-storage facilities grow more attractive to criminals and freeloaders alike. Reports of people dumping tires, oil, gasoline and even biohazardous chemicals in rented storage units seem to accumulate. So how can you protect your facility from becoming a toxic-waste dump? Prevention is the best approach, but there isn’t one specific way to keep tenants from storing and dumping such materials. There are measures you can take to reduce your risk, and insurance-coverage options are available should you fall victim to pollution from a covered cause of loss.

The Cost of Clean-Up

When a tenant leaves behind hazardous chemicals, even the smallest cleanup and disposal jobs can cost thousands of dollars. Check your insurance policy to see what type of clean-up and disposal coverages you have or may want to consider purchasing. Most policies have a built-in limit for pollutant clean-up that covers up to certain amounts per occurrence.

Keep in mind coverage only pays for covered causes of loss such as fire, vandalism, theft and windstorms to name a few (an actual list of covered causes can be found in your insurance policy). For example, if you have a fire on your property and the aftermath leaves behind chemical wastes that must be extracted from the ground, your pollutant clean-up coverage would most likely cover the costs as long as it happened on the property during your policy period.

Pollutant clean-up does not cover the expenses to legally remove hazardous contents left in a unit by a tenant such as tires, oil, gasoline, meth labs or biohazardous chemicals. Hazardous-contents removal is an optional coverage that will reimburse you up to certain limits for expenses you pay to remove such contents dumped by a tenant. Please note this optional coverage does not cover any fines or legal fees the storage owner may have to pay.

It is important to evaluate the surrounding neighborhood of your storage facility—particularly its crime rate—when considering this coverage. Storage owners who set up shop in industrial or high-crime areas may want to consider purchasing a higher limit. Storage facilities in less-populated areas with a low crime rate may not need higher limits or any coverage at all.

Stop the Problem Before It Starts

Sometimes people store prohibited items simply because they do not know better. Make prospective tenants aware of the types of materials considered hazardous and why they are not allowed to be stored at your facility. They may not realize items such as tires and cleaning materials become a fire hazard when stored at warm temperatures.

Make it clear that storing hazardous or toxic materials in units is not allowed, and reinforce the policy by including it in the lease agreement. Remind existing tenants of this policy by posting signs in the rental office and around the facility. The goal is to educate uninformed tenants as well as scare off potential dumpers. The more difficult you make it for people to abuse your units, they more likely they will go elsewhere.

To avoid purposeful dumping or criminal activity, request positive identification from every tenant, including a driver’s license and Social Security number. Authorities can find most people with these two items, so do not accept anything less. In addition, do not accept a P.O. box as the sole contact address. Insist on a physical address where the tenant can be located if necessary. Some say this may deter people from renting units, but more important, it will decrease your risk of renting to a dumper or someone looking to engage in illegal activity.

Once you have the prospective tenant’s contact information, quickly verify its veracity. Mail a welcome letter to the address and make courtesy phone calls to the given numbers. If any of the contact information is inconsistent, confront the tenant immediately and have it corrected before allowing him access to his unit. Most likely, an incorrect phone number will be nothing more than a simple mistake, but it is better to be safe than sorry.

If someone is looking to store hazardous materials at your facility, he may bring it in a truck or van, as most of these items cannot fit in smaller vehicles. Make your tenants aware all vehicles may be searched on entry to the facility. This way, you can deter someone from bringing in prohibited materials and stop the problem before it starts. Enforce the search policy whenever you have suspicious-looking vehicles entering your property, such as unmarked covered trucks or vans, especially if they tend to back up into the unit on every visit.

There is no guaranteed system for preventing a self-storage unit from becoming a haven for hazardous materials. You can reduce the chances of your facility’s exposure to toxic dumping by taking preventive measures, enforcing policies and having appropriate insurance to assist with costs should you fall victim.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, call 800.844.2101; fax 480.970.6240; e-mail uif@vpico.com; visit www.vpico.com/universal .

Comments
comments powered by Disqus