Is Your Self Storage Business Insurance Portfolio Up to Date?

As a self storage operator, you face unique risks. Purchasing only the insurance basics is not enough. As the self-storage industry has evolved, so have the risks, and there are specialty coverages that need to be considered. If you don’t want to expose yourself to lawsuits and financial anguish, look into adding the following coverages to your policy as necessary.

Coverages to Consider for Your Self Storage Business

Cyber Liability

In today’s technical climate, every business is exposed to cyber extortion and data breach. As cyber thieves become smarter, you need a plan in place to stay ahead of the game. If your company suffers a breach, your customers feel violated because their privacy has been compromised. It’s critical that you maintain your reputation and customer trust. As a self-storage owner you should be prepared to deliver recovery assistance. 

Employment Practices Liability

All businesses are vulnerable to employment-related claims. This is true whether you hire managers, a third-party management firm, or independent contractors. Employment practices liability insurance (EPLI) provides coverage for employers against claims made by employees alleging the following matters:

• Discrimination based on sex, race, age, or disability
• Wrongful termination
• Harassment
• Other employment related issues (e.g. failure to promote)

EPLI is even more important for a small business that lacks a legal department or employee handbook detailing policies and procedures.

Directors and Officers Liability

Depending on how your business is structured, officers and executives could be exposed to risk. Directors and officers liability coverage is intended to protect individuals serving in these positions from being sued. It can also cover legal fees and costs that may be incurred as a result of such a suit. Seek advice from an insurance broker who is well-informed in this area.

Hired and Non-Owned Auto Liability

If your employees attend offsite meetings, work from home, or mystery shop a competitor, you need hired and non-owned auto insurance. This insurance covers liability expenses for accidents involving vehicles that are used for work purposes but not owned by the business.  If your employee has an accident in his or her personal vehicle during work hours, you may need liability protection against bodily injury or property damage.

Roof Replacement Cost

If your facility is in a region that is susceptible to damaging wind or hail, you want to be sure that your insurance policy does not contain a roof-restricting endorsement. This endorsement means that your insurance company would not be required to repair or replace your roof in the event of wind or hail damage. Your insurance agent can explain available options.

Extended Business Income

If you experience a loss of income to your self-storage business, this coverage pays for lost profits and expenses. It’s important to understand that a self-storage property takes longer to recover occupancy than most businesses. Construction may be complete, but that doesn’t mean the business is operational. Consider how long it will take to rebuild and add that loss into your most profitable time of year. This is the amount of time you need to recover to normal operations.

Ordinance or Law Coverage

This is coverage for loss caused by enforcement of ordinances or laws regulating repairs of damaged buildings. Older structures may need electrical, heating, and HVAC upgrades based on city codes. Some communities require that a building damaged to a specified extent be demolished and rebuilt according to local building codes. Standard, unendorsed commercial property insurance does not cover losses of the undamaged section of the building. Have your insurance agent review endorsements to cover these losses.

Conclusion

As your company grows, it’s critical that you regularly review and reassess your coverage with a qualified insurance agent. Protect yourself and don’t risk financial loss. Find a reputable insurance agent that you trust. When the unusual or unimaginable happens, you want to know your “covered.”