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Avoiding Legal Liability Exposure in Self-Storage Through Tenant Protection and Insurance

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This means the tenant must provide proof of a current homeowner’s, business owner’s or endorsed renter’s policy in order to store at the facility. As an effective and convenient alternative, storage operators will often offer an insurance/protection program for purchase.

By obliging the tenant to provide proof of insurance, the operator effectively transfers risk (limited to “named perils” covered in the insurance provider's agreement) to the tenant’s insurance company. This reduces the chance the tenant will file a claim against the storage operator for any damage that may occur to his stored possessions. Perhaps even better is the transfer of risk to insurance offered through the storage operator, often referred to as tenant-insurance or tenant-protection programs.

A Tenant-Insurance Program

Tenant-insurance programs often have much lower deductibles than homeowner’s or business owner’s policies, making for a higher likelihood the tenant will use that option rather than file any kind of a claim against the storage operator. In addition, these programs offer renters a quick and convenient solution to satisfy the insurance requirements of their lease. It’s affordable, short-term coverage designed specifically to protect property while it’s in a rented self-storage space.

This risk-transfer technique is classic risk management, but as any service reseller, the storage operator must select a provider that settles claims in a fair and timely manner, covers the most exposures possible, and provides real value to the tenant such as replacement-cost protection. Along with reducing exposure to lawsuits for damage to customer goods from any number of named perils, the storage operator may be eligible for a discount on his customers’ goods legal liability insurance from his property and casualty provider.

A properly implemented tenant-protection program results in a dual bonus: It reduces liability exposure for damage to customer goods. It also creates a repeated and sustainable profit center for the self-storage operator. The benefits should garner the attention of any operator who is not already running such a program.

Matt Schaller is vice president of sales and client services for Storage Property Protection (SPP), a provider of self-storage tenant protection. Headquartered in Phoenix, the company operates nationwide. SPP serves the needs of the modern self-storage industry by partnering with owner/operators to provide customers with protection and maximize the operator’s revenue potential. For more information, call 877.575.7774; e-mail, visit

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