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Workers’ Compensation Coverage: What It Is, Why Your Self-Storage Business Needs It

By Melanie Wichelman Comments
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When hiring staff, follow your state’s statutes and purchase adequate insurance to protect your business. When hiring licensed independent contractors or subcontractors, ensure they carry adequate insurance to reduce your liability in the event of a vendor-exposure claim. Hiring friends and family may be an attractive idea since they may be less expensive and you already have a great relationship with them; just make sure you follow the same protocols. Whether it’s a friend, family member or business partner, if someone is injured at the facility, it could become costly and cause hard feelings between all parties.

Financial Impact

The cost of a workers’ comp has many variables. The premium is based on several factors, such as facility location, payroll, class code, experience modifications and number of employees.

Additionally, coverage is an auditable policy, so if you underestimate your payroll, you’ll owe additional premium at the end of the year. If you don’t complete the necessary audit forms, the carrier may create its own calculation, which will probably result in additional cost to your business. On the other hand, if you overestimate your premium, the carrier may apply a credit to the following year’s insurance renewal, reducing the total expense.

Most owners exclude themselves from workers’ comp coverage. This is done for various reasons but primarily because they wouldn’t file this type of claim against themselves. Since the premium is based on annual payroll and number of employees, eliminating the owner can lower the cost. Most owners prefer to use their own healthcare benefits for coverage in the event of an accident or injury, which can save premium dollars.

Finding an Agent

When selecting an agent to help you with insurance coverage, find a carrier who has experienced claims handling. If an employee gets hurt on the job, you want him to recover and get back as quickly as possible. Your business relies on staff showing up to work healthy. The way a claim is handled could impact how soon an employee returns to work. Not only is responsiveness important, you want a carrier who has access to a wide variety of healthcare networks that are experienced in treating on-the-job injuries.

Workers’ comp is a vital, reasonably priced product that should be purchased if you have one or more employees. Talk to your insurance agent to ensure you have the correct coverage in place. Workers’ comp will give you peace of mind while protecting your business and employees.

Melanie Wichelman is an account executive with Universal Insurance Programs, which has created and provided specialized insurance coverages to the self-storage industry for more than 20 years. For more information, call 800.844.2101; visit

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