Self-Storage Insurance Policy Information
Self-Storage Insurance. We live in a time where people own more things and the more things they own, the less space they have. For this reason, the self-storage industry has risen in demand. Although you can make money, there are many risks that come with operating this type of business.
Mini-warehouses offer long and short-term storage facilities to both business and residential customers. The length of storage varies from a few days to years, depending on the customer's need. Individual storage units vary in size. Customers generally provide their own locks or security codes to ensure privacy and restrict access to their belongings.
While office hours are limited, customers must be able to access their individual units 24 hours a day, seven days a week. Units may or may not be climate-controlled. Some mini-warehouses sell boxes and packaging supplies, or offer free use of dollies. Others rent trucks and trailers to customers to transport their goods to the storage facility.
With the number of risks faced in a self storage operation, you should get self-storage insurance to protect your facilities. In this post, we'll take a look at the different types of insurance policies to keep your self-storage business protected.
Self-storage insurance protects your facility from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked self-storage facility insurance questions:
- What Is Self-Storage Facility Insurance?
- How Much Does Self-Storage Insurance Cost?
- Why Do Self-Storage Facilities Need Insurance?
- What Type Of Insurance Do Self-Storage Facilities Need?
- What Are Self-Storage Facilities Risks & Exposures?
- What Does Self-Storage Insurance Cover & Pay For?
What Is Self-Storage Facility Insurance?
Self-storage facility insurance is a type of insurance that covers the contents of a self-storage unit and the building or facility where the unit is located. This type of insurance typically covers damages or losses caused by events such as fire, theft, vandalism, or natural disasters.
It can also provide liability coverage for accidents or injuries that occur on the property. The cost and coverage options vary depending on the specific policy and the location of the facility.
It's important for individuals renting a storage unit to review and understand the coverage provided by their facility and consider purchasing additional insurance if needed.
How Much Does Self-Storage Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small self-storage businesses ranges from $67 to $129 per month based on location, number of units, payroll, sales and experience.
Why Do Self-Storage Facilities Need Insurance?
Self-storage facilities need insurance to protect against potential risks and liabilities that may arise during the course of their business operations. These risks can include damage to the facility or its contents, theft, and legal liabilities such as accidents or injuries that occur on the premises.
Self-storage facilities may also need insurance to cover their employees in the event of an injury or illness while working. Additionally, insurance can help protect against financial losses resulting from natural disasters or other unexpected events.
Overall, insurance is essential for self-storage facilities to ensure that they are financially protected against any potential risks and can continue to operate smoothly and successfully. Without insurance, a self-storage facility could face significant financial losses that could potentially lead to closure.
What Type Of Insurance Do Self-Storage Facilities Need?
Self-storage facilities typically need several types of insurance, including:
- Commercial Property: This covers damage to the building and its contents, including the storage units and any other structures on the property.
- Liability: This covers any accidents or injuries that may occur on the property, such as slips and falls.
- Business Interruption: This covers any loss of income the facility may suffer due to a natural disaster or other unexpected event.
- Environmental Liability: This covers any damage to the environment caused by the facility, such as pollution or contamination.
- Cybersecurity: This covers any loss or damage resulting from a cyber attack or data breach.
- Tenant Insurance: Some self-storage facilities may also offer tenant insurance to their customers, which covers their stored items against damage, theft, or loss.
Some additional types of insurance that self-storage facilities may want to consider include:
- Flood Insurance: If the facility is located in an area prone to flooding, it may be advisable to purchase flood insurance to protect against losses caused by water damage.
- Crime Insurance: This covers losses resulting from theft, vandalism, or other crimes committed on the property.
- Workers' Comp: This covers medical expenses and lost wages for any employees who are injured on the job.
- Commercial Umbrella: This provides additional liability coverage over and above the limits of the facility's other insurance policies.
Overall, self-storage facilities need a combination of property, liability, and business interruption insurance to protect against potential risks and losses.
What Are Self-Storage Facilities Risks & Exposures
Premises liability exposure is moderate due to the regular visits by clients to their rental units. Maintenance and housekeeping can prevent losses due to slips, trips, and falls. Sidewalks, parking lots, and entrances to units must be in good condition. Vacant units should be inspected and cleaned before leasing to the next client. There must be adequate security in place, including lighting and fencing. In some cases, 24-hour security is appropriate.
Personal injury exposures can arise from allegations of invasion of privacy, wrongful eviction, assault and battery, and negligent infliction of emotional distress. There should be written procedures on the handling of late payments from clients and the confiscation and sale of stored property to pay back rental fees.
Workers compensation exposure can be limited to that of an office, or more extensive if packing services are offered. Back and lifting injuries, hernias, sprains, and strains may occur as spaces are cleared out. The training of workers in material lifting and conveying devices is important. Workers should be trained to respond appropriately to hold-ups and to unhappy clients whose property is being confiscated due to nonpayment of rents.
Property exposures are largely unknown because there are no requirements regarding disclosure of contents. While there may be leases or contracts prohibiting the storage of flammables and hazardous materials, violations are not usually noted until after a loss. Fire can start from the storage of flammables, escape of fumes from stored vehicles or watercraft, or from faulty or inadequate electrical wiring.
All wiring must be up to code and adequate for the operation. Good housekeeping and fire controls are critical. Smoking should be prohibited. Stored items may be a target for thieves. Security should be appropriate for the types and values of items stored and for the location.
Equipment breakdown exposure is moderate if units are climate-controlled.
Crime exposure is from employee dishonesty and money and securities. Background checks, including criminal history, should be conducted on all employees handling money. Regular audits, both internal and external, are important in order to prevent employee theft of accounts. Receipts must be provided for all payments and compared to money received.
Inland marine exposures include accounts receivables, computers, valuable papers and records, and warehouse operators' legal liability. Warehouse operators' legal liability will depend on the contract between the facility and its customers, which should spell out who is responsible for damage to stored goods.
If climate-controlled units are offered and the equipment breaks down, the warehouse could be held liable for damage to stored goods. If locks are provided to customers, they should be changed regularly. There should be firewalls between storage units to prevent access from adjacent units. All data should be duplicated and placed off site for easy replication.
Commercial auto exposure can be high if pickup and delivery services are offered. All employee drivers must be well trained and have valid licenses for the type of vehicle being driven. They must be trained in appropriate handling methods. MVRs must be run on a regular basis. Random drug and alcohol testing should be required.
Vehicles must be well maintained with records kept at a central location. If vehicles or trailers are rented to customers, their driving habits are unknown to the warehouse. A copy of the renter's driver's license and proof of insurance should be retained. The rental contract should identify permitted drivers and state that unlicensed or minor drivers are not allowed to drive the rented vehicles. It should also include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the vehicle to limit the warehouse's exposure to vicarious liability.
If a collision damage waiver is offered, the customer's signature is needed to document whether this was purchased or declined. The customer should also be required to sign a vehicle pre-inspection form to minimize disputes when the vehicle is returned with damages.
What Does Self-Storage Insurance Cover & Pay For?
Self-storage facilities may face various types of lawsuits, and the reasons for such lawsuits may include but are not limited to:
Property damage: Self-storage facilities may be held liable for property damage caused to customers' stored items due to reasons such as fire, water damage, or theft.
Insurance protection: Self-storage facilities can purchase property insurance that covers damage to customers' stored items. This insurance can help pay for the cost of repairing or replacing the damaged items and may also cover any legal expenses associated with the lawsuit.
Personal injury: Customers or visitors to the self-storage facility may be injured on the premises due to reasons such as slip and fall accidents, faulty storage units, or inadequate security measures.
Insurance protection: Self-storage facilities can purchase general liability insurance, which covers bodily injury and property damage claims arising out of the facility's operations. This insurance can help pay for medical expenses, lost wages, and legal fees associated with the lawsuit.
Breach of contract: Self-storage facilities may be sued for breach of contract if they fail to fulfill their obligations under the rental agreement, such as failing to maintain the storage units or charging unauthorized fees.
Insurance protection: Self-storage facilities can purchase professional liability insurance, also known as errors and omissions insurance, which covers claims arising from professional mistakes or negligence. This insurance can help pay for damages awarded in a breach of contract lawsuit and legal expenses associated with defending against the claim.
Wrongful sale of stored items: Self-storage facilities may be sued for wrongfully selling customers' stored items, either due to a mistake or for non-payment of rent.
Insurance protection: Self-storage facilities can purchase sale and disposal liability insurance, which covers claims arising from wrongful sale or disposal of customers' stored items. This insurance can help pay for damages awarded in a lawsuit and legal expenses associated with defending against the claim.
In conclusion, insurance can protect self-storage facilities from various types of lawsuits by providing coverage for property damage, personal injury, breach of contract, and wrongful sale of stored items. It is essential for self-storage facility owners to assess their risks and purchase appropriate insurance coverage to protect their business and assets.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4225 General Warehousing and Storage
- NAICS CODE: 531130 Lessors of Mini-warehouses and Self-Storage Units
- Suggested Workers Compensation Code(s): 9015 Building or Property Management - All Other Employees
Description for 4225: General Warehousing and Storage
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 42: Motor Freight Transportation And Warehousing | Industry Group 422: Public Warehousing And Storage
4225 General Warehousing and Storage: Establishments primarily engaged in the warehousing and storage of a general line of goods. The warehousing of goods at foreign trade zones is classified in Industry 4226. Field warehousing is classified in Services, Industry 7389.
- General warehousing and storage
- Miniwarehouse warehousing
- Warehousing, self-storage
Self Storage Insurance - The Bottom Line
A lawsuit could destroy your business and everything you've worked for in your business. Owning a business in the self-storage industry can be lucrative, but there are many risks that you face operating one. The last thing you want is a lawsuit destroying your business. This is why it's important for you to find the right insurance policies to protect your business.
Additional Resources For Warehouse And Storage Insurance
Learn about small business warehouse and storage insurance - which protects storage and warehouse facilities and protects their inventory from property damage from fire and weather, vandalism and theft and liability coverage as well.
The warehouse and storage industry is a crucial part of the supply chain for many businesses. Warehouses and storage facilities house valuable goods and products that need to be protected from various risks such as fires, natural disasters, and theft. These risks can lead to significant financial losses for businesses if they are not adequately insured.
Commercial insurance in the warehouse and storage industry helps to cover the cost of damages or losses to stored goods due to unforeseen events. This can include coverage for damages caused by fires, storms, and other natural disasters, as well as theft and vandalism. Without business insurance, businesses could be left to cover the cost of these damages out of pocket, which can be financially devastating.
In addition to covering physical damages, warehouse and storage insurance can also provide liability coverage. This can protect businesses from legal action if someone is injured on the premises or if damage is caused to a third party's property.
Overall, the warehouse and storage industry needs commercial insurance to protect against financial losses and legal liabilities that can arise due to unforeseen events. Without insurance, businesses in this industry would be at a much higher risk for financial ruin.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Contractors' Equipment, Valuable Papers and Records, Warehouse Operators' Legal Liability, General Liability, Employee Benefits, Umbrella, Hired and Non-Owned Auto and Workers Compensation
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Goods in Transit, Cyberliability, Employment-related Practices, Environmental Impairment, Business Automobile Liability and Physical Damage, Stop Gap Liability and U.S. Longshore and Harbor Workers Coverage