No. 6—Business Income (Business Interruption)
Business-income coverage protects your operation’s income in the event of a loss requiring reconstruction. A typical policy provides regular business income and extra expenses incurred for 12 to 15 months plus additional time following reconstruction while storage spaces are being re-rented. Some policies offer options to extend the coverage for 18 to 24 months. This coverage can be a significant factor in whether your business survives a catastrophic event.
No. 7—Employee Dishonesty
Most employees are honest and work to help your business succeed. However, the ones who aren’t can cause business owners a lot of trouble. Employee-dishonesty coverage covers any loss of money or other business personal property belonging to the insured by dishonest or fraudulent acts of the operation’s employees. A common practice to mitigate this risk is to complete a criminal background check on new hires and an annual audit.
No. 8—Cosmetic-Loss Limitation Endorsement
For self-storage business owners in hail-prone states, this endorsement may make the difference in whether a carrier is willing to offer a quote on a particular risk. A cosmetic-loss limitation endorsement offers business owners a premium credit for facilities in specific locations. The endorsement limits coverage for cosmetic hail damage to a metal roof. Hail damage to roll-up doors, siding, downspouts and gutters is not reduced on some policies. In addition, hail damage to the roof resulting in the failure of the metal roof covering to perform its intended function of keeping out the elements is not affected by this endorsement.
No. 9—Cyber-Protection Coverages: Data Compromise and Identity Recovery
Businesses rely on computers for day-to-day operation, but that dependence can result in costly exposures in the event of cyber crime or data breaches. Data-compromise coverage helps self-storage businesses respond to data theft by providing services such as forensic IT reviews, legal assistance, credit monitoring, identity restoration services and notifications to affected individuals. The coverage responds to a wide range of data breaches including electronic theft (hacking), theft of computer systems, theft of data by employees, accidental publishing, procedural errors and fraud.
Identity-recovery coverage provides case-management service and expense reimbursement in the event of certain instances of identity theft. The key difference in these coverages is data-compromise coverage protects businesses and identity-recovery coverage protects individuals.
No. 10—Tenant Insurance
It may seem unusual to cite tenant insurance in a list of commercial insurance considerations, but the truth is the importance of implementing a tenant-insurance program at self-storage facilities is difficult to overemphasize. This type of insurance has been proven to reduce the facility owner’s liability exposure in the event of tenant loss, which is a critical element of risk management.
Some tenant-insurance programs even include coverages that protect the facility in addition to those protecting tenants’ stored belongings. A tenant-insurance program may be strengthened even more by making insurance mandatory and requiring tenants to provide evidence of insurance.
Keep in mind these are just a few facets of your commercial-insurance coverage. Your insurance agent will be able to analyze your current coverage and make recommendations for changes to your policy that can protect your valuable investment from costly exposures.
Keith McConnell is vice president of business development for Phoenix-based MiniCo Insurance Agency LLC, which provides specialty programs for self-storage businesses in the United States and Canada. For more information call 800.528.1056; visit www.minico.com.