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Self-Storage Insurance Fail = Bad News Dont Risk Your Business!

Self-storage operators never know when a crisis may hit, whether it is a natural disaster or an injury to an employee or a customer. Implementing a risk-management plan should be among every operators most important business investments. Failure to carry coverages to protect your property and yourself from risks and liability is not a gamble worth taking.

Teri Lanza

December 26, 2012

4 Min Read
Self-Storage Insurance Fail = Bad News  Dont Risk Your Business!

Tony Jones***A guest installment by Tony Jones, Inside Self-Storage Online Content Editor

Earlier this summer, my hot-water heater sprung a leak, flooding the garage and causing a fair amount of water damage to interior walls in a hallway and bathroom. My wife and I had just returned from vacation and were fortunate the leak occurred just while we were home and not while we were traveling. Had the latter occurred, we would have been faced with a major construction project, mold and who knows what else.

As it was, we were inconvenienced for several days with the incessant drone of industrial fans to dry out the salvageable drywall to prevent mold, followed by reconstructing the garage wall behind the water heater and cosmetic fixes to the interior of the house. We did not file an insurance claim because the repairs for the damage did not exceed our deductible enough to warrant the red tape and mark on our file.

Like many consumers, Im not fond of insurance companies and all the bureaucracy they represent, but whether youre a homeowner or a self-storage business owner, failure to carry the necessary coverages to protect your property and yourself from risks and liability is not a gamble worth taking.

Self-storage operators never know when a crisis may hit, whether it is a natural disaster, like a fire or flood, or an injury to an employee or a customer. Consider this recent story, in which a storage customer apparently fell on a patch of ice while on site, and now, two years later, is suing for $50,000 in damages.

Two years? Thats quite a time lapse, and no doubt many operators would have thought the incident was behind them (if they were even made aware of the fall). It is a reminder that litigation doesnt care about timeliness and risk management is among the an operators most important business investments.

Reducing risks and exposure are the primary reasons why Inside Self-Storage each year delivers several stories and free resources on insurance matters. I encourage you to take a look at all the educational material available through the Insurance topic page on the website. If you are so inclined, you can even subscribe to an RSS feed that will notify you whenever we assign a story or article to the page.

Among the stories operators may find most useful are Rental Agreements Help Self-Storage Operators Limit Liability Exposure and Protecting a Self-Storage Business From Property Loss and Liability Exposure: Insurance Coverage Limits and Exclusions. Both are designed to help operators better manage their business and protect their assets, including their bottom line.

We also have a 16-page Self-Storage Insurance Resource Guide and Supplement available for purchase through the Inside Self-Storage Store, our e-commerce website that provides on-demand insight and education for the industry. The guide and supplement form a comprehensive handbook for facility operators on tenant insurance, risk-management, filing a claim or incident report, steps to take when an accident occurs, workers compensation and much more.

Of course, self-storage operators are not excluded from entering the insurance game themselves. Creating a tenant-insurance program can be a meaningful service for customers and create an ancillary profit center for your facility. ISS recently created a free digital issue, "Protection, Profit and Policies: Implementing a Successful Tenant-Insurance Program," to provide insight regarding insurance options and setting up a program.

Carrying the correct insurance coverage is a little like paying into a hedge fund; you are paying upfront to save costs down the road. The rub is you hope you never have to file a claim, but having peace of mind from adequate coverage and minimizing exposure will help you sleep at night and preserve the health of your business.

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