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Avoiding Liability Exposure at Your Boat/RV-Storage Facility: 4 Ways to Reduce Your Risk

While boat and RV storage is a great way to increase revenue at your self-storage facility, it’s important to be aware of the risk exposures and requirements it adds to a business. Here are four ways to reduce that risk, including insurance and legal protection.

By Melanie Wichelman

Many self-storage owners today are adding a variety of products and services to their business model to generate more revenue. Boat and RV storage is one that can be profitable; and some operators are even specializing in this service, offering covered parking and buildings specifically for vehicle storage. These structures can be less expensive to build than standard self-storage, and the service can be lucrative for facilities in markets with demand.

But while boat/RV storage is a great way to increase income, it’s important to be aware of the risk exposures and requirements it adds to an operation. If you own or plan to venture into boat/RV storage, here are four ways to safeguard your business.

1. Get the Right Insurance Coverage

Facility owners should already be familiar with industry-specific insurance coverages such as customer-goods legal liability and sale-and-disposal legal liability. However, the value of boats and RVs is much higher than that of goods that are typically stored in self-storage units. For that reason, you want to discuss your current coverage limits with your insurance agent to confirm they’re sufficient. If necessary, make adjustments to ensure your business is properly covered.

Remember, as a self-storage operator, you never want to create a bailment over tenants’ property. Sometimes facility owners want to provide additional services for their boat/RV-storage tenants, such as concierge, fueling or washing. While this can enhance the customer-service aspect of the business, it also blurs the owner/tenant relationship and the rental contract. In providing some of these services, you may be assuming some care, custody or control of the vehicle. If you’re thinking about offering these services, you may need to obtain additional liability coverage for protection. Discuss this with your insurance agent.

Finally, ask your agent about pollution coverage. Many standard policies exclude certain pollution exposures, which can be a serious problem for facilities that offer vehicle storage. For example, fuel drips and leaks often go ignored or unnoticed by tenants. These create hazardous waste that could leave you with property damage—and the resulting cleanup can be expensive!

As with any risk, it’s imperative to be as proactive as you can. One preventive tip is to make sure all tenants who store boats, RVs or cars have working drip-protection on the vehicle. This can be made mandatory in your lease agreement.

Some owners offer a vehicle-waste dump station. Although this will help mitigate leaks and spills, it also creates more exposure for pollution liability. Specialty insurance can help to minimize the risk and cost in the event of a pollution-related incident. Check your policy coverages or look into a separate pollution policy.

2. Use the Right Contract

Risk management is vital for all businesses to be at their best, and self-storage is no exception. When including outside or covered/enclosed vehicle storage, there are a few extra ways to prevent incidents and claims.

First, have a signed contract—and make sure it covers the right things. The lease agreement is a normal part of the self-storage rental process; however, a standard lease simply won’t do for boat/RV storage. A specific and separate contract is needed, as different restrictions apply to vehicle storage that aren’t covered in a standard lease. For example, it should include specific wording that limits and restricts the storage of hazardous fluids, gases and tires.

Also retain copies of the owner’s vehicle registration and auto-insurance policy. Always make sure the name on the registration and policy match your tenant’s name. Never accept anything handwritten.

The lease should also include a space for a description of the property being stored, including the vehicle year, make, model and color; a license number; and any type of vehicle-identification or serial number. Keep these files up-to-date. It’s also recommended to take pictures of the stored vehicle to add to the tenant file.

3. Physically Protect the Property

In addition to having a signed lease agreement, make special preparations to your vehicle-storage area. Uncovered parking spaces should be properly numbered and clearly defined with dividing lines. This will help to avoid tenant confusion and crowding as well as minimize potential property damage. It will also assist the facility manager in keeping the accounts organized. Most covered or enclosed parking structures are pre-planned with specific spaces in mind, but ensure these are clearly differentiated as well.

Installing crash posts is another way to reduce property damage. Boats are typically moved on trailers hitched to large trucks. These vehicles can be difficult to navigate through a storage facility. Make sure your aisles are wide enough for a trailer/truck combination.

On a similar note, check with your gate vendor to adjust the gate sensor and timing. A longer, trailered vehicle will need more time to enter and exit the site. This can help you avoid any unforeseen accidents and reduce your risk.

4. Follow the Laws

As with traditional self-storage, one of the most critical things to do is follow your state lien laws in the event of a delinquency. While it can be more difficult to dispose of a vehicle than other stored goods, many states have instituted a way to retitle vehicles so operators can reclaim lost revenue and the space. Consult with an attorney in the event of a vehicle-storage delinquency before you take action.

Boat/RV storage is a unique kind of exposure for self-storage facilities. Whether you already include this type of service or you’re looking to add it, your insurance company and attorney can help. To safeguard your business, contact your agent and legal counsel with questions or any time you make a significant change.

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 www.universalinsuranceltd.com.

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