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Specialized Insurance Coverages for Self-Storage: Understanding Industry-Specific Policies

Randy Tipton Comments

Insurance is often an overlooked investment. But during the lifetime of your self-storage business, it’s likely you will experience property damage, a liability claim or another type of loss that may create a significant financial impact to your bottom line if you’re not adequately insured. In this article, you’ll find highlights of coverages you should pay special attention to when choosing an insurance program.

Your self-storage operation involves technical, legal and financial aspects not typically found in other businesses. Some of the exposures you face are unique to the industry, and you should seek customized coverage for your distinctive needs. Insurance specialists can provide you with programs and industry knowledge to assist you in tackling special facility requirements.

Standard policies may provide coverage for your building, business-personal property and business liability. A self-storage policy typically offers those basic coverages plus protection against hazards that only surface in our industry. Following is an explanation of two of these vital coverages.
Customers’ Goods Legal Liability

During the course of your business, you act as a landlord, but you do not take possession of tenants’ property. You’re not responsible for those items, as you’re simply renting space. However, situations may arise in which you might be considered negligent, creating a potential legal liability. For example, a tenant’s goods might appear to be damaged from intrusive water. If you haven’t properly maintained your roof, you might be considered negligent and become liable for damages.

Customers’ goods legal liability would be the appropriate coverage for this kind of claim. Defense costs may also be included, even if the claim is found to be groundless, false or fraudulent. This coverage might also provide for damage done to customers’ goods stored in the open. This coverage isn’t available with most standard business owner’s policies, but is available through a self-storage insurance program. 

Sale and Disposal Legal Liability

Almost every self-storage owner will face the unenviable task of evicting a tenant for failure to pay rent, reclaiming the storage space and removing or disposing of the tenant’s property. Sale and disposal legal liability provides protection against conversion—the act of wrongly taking, selling, using or destroying the goods of another party.

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