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insurance for self-storage facilities
tailored coverage for:
- Building, Contents, Signs, Fences, etc.
- Loss of revenue if you’re temporarily shut down due to a covered claim.
- Medical costs if a customer slips and falls at your location.
- Defense costs in the even you’re sued for property damage or bodily injury
You can customize your plan to include industry-specific coverage for:
- Property of Others including tenant insurance
- Business Auto (including delivery or snow plowing vehicles
- Cyber and Data Liability
- Workers Compensation
- Environmental Pollution
- Liability
- Flood
- Builders Risk for new building/unit construction
- Umbrella and more…
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Self-storage business owners have unique insurance needs. Naturally, you need to protect your buildings from loss with Commercial Property Insurance but you also need to protect your business in case someone is injured on the premises with General Liability Insurance. While most self-storage facility owners understand the importance of having the right property and general liability policy, not all policies are the same.
We believe knowledge is power, and have created the guide below to help bridge the gap between the “lawyer language” in your insurance contract, and the every-day business owner. Read on to learn more, or start a quote if you prefer expert assistance.
This insurance guide will help you:
- Understand how insurance companies determine premiums specifically for Self-Storage Facilities.
- Learn about suggested coverages you should consider for your insurance plan.
- Note typical exclusions to watch out for.
Premiums for self-storage businesses are calculated based on various factors that insurance companies consider when assessing the risk exposure of the facility. While the exact calculation may vary between insurance providers, the following factors typically play a role in determining premiums for self-storage businesses:
Property Value: The value of the self-storage facility’s property, including the buildings, structures, and equipment, is a significant factor in premium calculation. Higher property values generally result in higher premiums.
Coverage Limits: The coverage limits chosen for property insurance, liability insurance, and other relevant coverages affect the premiums. Higher coverage limits typically lead to higher premiums since they provide greater protection against potential losses.
Location: The geographic location of the self-storage facility is an important consideration. Factors such as local crime rates, exposure to natural disasters, and regional liability trends can impact the premium calculation.
Security Measures: The security measures in place at the self-storage facility, such as access controls, surveillance systems, and alarms, can influence the premiums. Facilities with robust security measures may be eligible for lower premiums as they are considered lower risk.
Claims History: The claims history of the self-storage facility is taken into account. If the facility has a history of frequent claims or significant losses, it may result in higher premiums due to the perceived higher risk.
Business Operations: The type and scope of services provided by the self-storage facility can affect premiums. Additional services such as vehicle storage or climate-controlled units may lead to adjustments in premiums to reflect the associated risks.
Deductibles: The deductible amount selected for insurance policies can impact the premiums. Higher deductibles generally result in lower premiums since the facility would bear a larger portion of the risk.
It’s important to note that each insurance company may have its own underwriting guidelines and rating methodologies. To get an accurate premium quote for your self-storage business, it’s recommended to consult with insurance providers specializing in this industry. They can assess your specific needs, evaluate the risk factors unique to your facility, and provide you with customized premium estimates based on the relevant factors.
When it comes to insurance coverage for self-storage facilities, several types of coverage are typically recommended to adequately protect your business. These coverages may include:
Property Insurance: This coverage protects the physical structure of your self-storage facility, including buildings, storage units, and equipment, against perils like fire, vandalism, and natural disasters. It can also extend to cover tenant property stored within the facility.
General Liability Insurance: General liability insurance provides coverage for third-party bodily injury or property damage claims that may arise from accidents or incidents that occur on your premises. It helps protect your business from legal expenses and potential lawsuits.
Business Interruption Insurance: Business interruption insurance provides coverage for income loss and ongoing expenses if your self-storage facility is temporarily unable to operate due to a covered event, such as fire or water damage. It can help replace lost income and cover necessary expenses during the restoration period.
Employee Theft and Crime Coverage: This coverage protects your self-storage facility against theft, dishonest acts, or fraudulent activities committed by your employees. It provides financial compensation for losses resulting from employee misconduct.
Cyber Liability Insurance: In today’s digital age, self-storage facilities may handle sensitive customer data or rely on computer systems for operations. Cyber liability insurance helps protect your business in case of data breaches, cyberattacks, or other cyber incidents that could lead to financial losses or reputational damage.
Equipment Breakdown Insurance: This coverage protects against the costs associated with sudden and accidental breakdowns of essential equipment, such as heating and cooling systems, security systems, or electrical equipment. It can help cover repair or replacement expenses and minimize business interruptions.
Bailee’s Coverage: Bailee’s coverage is specifically designed to protect your business against damage or loss to customers’ property while it is in your care, custody, or control. It provides coverage for damage caused by covered perils, such as fire, theft, or water damage, to customers’ stored belongings.
These are some of the common coverages recommended for self-storage facilities, but the specific needs of your business may vary. It’s important to work with an insurance provider who specializes in self-storage facility insurance to assess your unique risks and determine the most appropriate coverage options for your business.
Determining the appropriate amount of coverage for your self-storage facility involves considering various factors specific to your business. While the exact coverage needs may vary, here are some considerations to help you determine the right amount of coverage:
Property Value: Evaluate the total value of your self-storage facility, including the buildings, storage units, and equipment. Ensure your property insurance coverage is sufficient to rebuild or repair damaged structures and replace essential equipment in the event of a covered loss.
Business Income: Consider the potential income loss if your facility is temporarily unable to operate due to a covered event. Business interruption insurance should provide coverage for the estimated duration it would take to restore your business operations and replace lost income during that period.
Liability Exposure: Assess your liability exposure and the potential financial impact of third-party claims against your self-storage facility. General liability insurance should provide adequate coverage for bodily injury, property damage, and legal expenses associated with potential lawsuits.
Customer Property: If you offer insurance or assume liability for customers’ stored belongings, ensure you have sufficient coverage to protect their property in the event of damage or loss. Bailee’s coverage is designed specifically for this purpose.
Cyber Liability Risk: Evaluate your exposure to cyber risks and the potential financial consequences of data breaches or cyberattacks. Cyber liability insurance should be tailored to your specific digital operations and the sensitive customer data you handle.
Equipment Value: Determine the value of essential equipment, such as heating and cooling systems, security systems, or electrical equipment. Equipment breakdown insurance should provide coverage for repair or replacement costs in case of sudden breakdowns.
It’s crucial to work closely with an experienced insurance provider specializing in self-storage facilities to assess your unique risks and calculate the appropriate coverage limits for your specific needs. They can help you navigate the complexities of insurance and ensure you have adequate protection for your self-storage business.
When considering insurance for your self-storage facility, it’s important to be aware of potential exclusions that may apply to your coverage. While specific exclusions can vary between insurance policies and providers, here are some common exclusions to be mindful of:
Acts of God: Insurance policies typically exclude coverage for damages caused by certain natural disasters or “acts of God,” such as earthquakes, floods, or hurricanes. Consider if additional coverage or separate policies are necessary to protect against these perils.
Terrorism: Acts of terrorism may be excluded from standard insurance policies. Depending on your location and level of risk, you may want to explore separate terrorism coverage options.
Improper Storage Practices: Insurance may exclude coverage for losses resulting from improper storage practices, such as failure to secure or maintain storage units properly. It’s crucial to adhere to proper storage protocols to mitigate risks and ensure coverage eligibility.
War or Civil Unrest: Damages caused by war, civil unrest, or riots may be excluded from coverage. Review your policy to understand the extent of this exclusion and consider supplemental coverage if necessary.
Pollution and Environmental Hazards: Insurance policies may have exclusions for pollution-related damages or environmental hazards. If your self-storage facility deals with hazardous materials or chemicals, you may need specialized coverage for environmental liability.
Employee Dishonesty: Standard property and liability policies may exclude coverage for losses caused by employee theft or dishonesty. Consider adding employee dishonesty coverage to protect against such risks.
Intentional Acts: Damages resulting from intentional acts or deliberate destruction may not be covered by insurance. It’s important to maintain proper security measures and protocols to minimize the risk of intentional harm.
It’s crucial to carefully review your insurance policy, including all terms, conditions, and exclusions. Work closely with your insurance provider to ensure you have a clear understanding of what is covered and any potential exclusions that may apply. They can help you customize your coverage to address specific risks and fill potential coverage gaps.
