Insurance Q&A

Amy Brown Comments
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Q: A tenant injured herself at my facility and expects my insurance company to pay her medical expenses. The woman lost her balance and fell on the stairs while exiting the rental office, but the steps and handrail were painted yellow for visibility and are in excellent physical condition. There was no evidence of water or any other material that could have caused her to slip. Will my insurance company be forced to pay for her injuries, even though her accident was not caused by negligence on my part?

A: Unfortunately, accidents happen, and it’s not always a direct result of negligence on the insured’s end. Your self-storage insurance policy includes medical-payments coverage (also known as medical expense), which is designed to cover expenses incurred for bodily injury caused by an accident with no regard to fault. Most policies include medical expense with a limit of $5,000 per occurrence, which can be increased to $10,000. The coverage will pay for first aid, medical, surgical, X-ray and dental, ambulance, hospital, professional nursing and even funeral services—as long as the costs do not exceed the insurance limits.

If the tenant decides to seek additional damages, your self-storage insurance policy should respond with a defense. If it turns out you are legally liable for her injuries, your insurance should pay out the sums for which you are obligated, up to the limits stated in your policy.

Q: I am considering a guard dog for my storage facility. I read that having a guard dog roam the property at night is a great and inexpensive way to deter crime during off-hours. Will this affect my insurance policy?

A: When deciding which security measures you will incorporate at your facility, first determine if you are trading one liability exposure for another. While a guard dog may deter some crime, professional offenders will quickly disarm a dog, while novices may attempt to outrun it. If they get mauled, your facility could face litigation.

A guard dog may make your facility less attractive to your insurance company, which could increase your premium or decline to renew your policy. If you use a dog, your insurance provider will probably ask you a variety of questions, such as what breed of dog it is, where you plan to keep it during business hours, how you plan to avoid tenant contact and if you have warning signs posted on your property. As some breeds are more volatile than others and can be unpredictable, most insurance companies prefer you keep the dog away from customers, especially children.

If your insurance provider decides to insure your facility with a guard dog on the premises, you will probably be asked to sign an animal-exclusion form to keep or obtain coverage. This contract excludes coverage for property damage, and bodily or personal injury that occurs as a result of any animal owned, maintained or leased by you, your facility or your employees.

Some would argue that dogs who attack would-be burglars are only doing their job, but that doesn’t mean the injured party or his family will not attempt to sue. Litigation could be very expensive, and since your policy may exclude coverage for acts by animals, you could be left with quite a bill.

Q: My insurance agent recommended I purchase hazardous-contents removal coverage as part of my policy. Isn’t this already covered under pollutant cleanup and removal?

A: Pollutant cleanup does not cover expenses to legally remove hazardous contents such as tires, oil, gasoline or chemical biohazards left in a unit by a tenant. Hazardous-contents removal is an optional coverage that will reimburse you up to certain limits for expenses you pay to remove such items. (Please note this option does not include any related fines or legal fees you may have to pay.) Even a small disposal job can cost thousands of dollars, so check your insurance policy to see what type of disposal coverage you have or may want to consider purchasing.

This article is a guideline to aid in minimizing risk in self-storage facilities. The information it contains is intended to be of general interest and does not address the circumstances of any particular individual or entity. Nothing in this document constitutes legal advice, nor does any information constitute a comprehensive or complete statement of the issues discussed or the laws relating thereto.

Amy Brown is part of Universal Insurance Facilities Ltd., which 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; visit www.universalinsuranceltd.com.

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