Self Storage- Liability/Property Insurance

2 Replies

Self Storage – “Company” Liability/Property insurance.

Below is a summary of our Storage insurance for one location for your information. This location is in a 1mm population metro area, 230 units, and cost is about $1,800,000 all in.

Limits of Insurance: Coverage:

Liability and Medical Expenses

$2,000,000/$4,000,000 Occurrence/Aggregate Comprehensive Business Liability

$2,000,000 Any One Person Personal & Advertising Injury

$4,000,000 Aggregate Products Completed Operations Aggregate

$2,000,000 Any One Fire Fire Damage

$25,000 Occurrence Customers' Goods Legal Liability Deductible: $0

$25,000 Aggregate Sale and Disposal Liability Deductible: $1,000

$10,000 Any One Person Medical Payments $1,000,000 Occurrence Hired Non-Owned

$300,000 Each Employee Employee Benefits Liability

$25,000/$25,000 Per Claim/Aggregate Employment Practices Liability

Loc Class Desc Coverage Limit Ded Valuation Type 1 Self-Storage

Blanket Building & Business Personal Replacement Cost Property $2,100,000 $25,000

Earthquake Included

Sinkhole Included

Windstorm or Hail Included 5%

Business Income Actual Loss Sustained 24 Months

Pollution Clean-Up & Removal $100,000

Employee Dishonesty $15,000

Money & Securities - Inside $10,000

Money & Securities - Outside $5,000

Accounts Receivable $25,000

Electronic Data $20,000

Valuable Papers & Records $25,000

Fine Arts $10,000

Employee Personal Property $10,000

Limited Pollutant Removal $25,000/$100,000

Cosmetic Loss Limitation Included

Equipment Breakdown Protection Included

Premium, Fees, and Taxes: BOP Premium: $ 7,760.00

Optional Terrorism Premium: $ 31.00

Total Premium: $ 7,791.00

Key notes:

a. The above insurer specializes in Storage units. If you go with your traditional family insurance premiums will be about twice this, since they don’t specialize in this market.

b. Flood insurance was taken out from last year. I will have a separate topic on Flood damage.

c. We offer their Customer insurance and follow the state Lien/Auction laws.

d. Earthquake, is not offered if you are in a fault zone.

e. Hail insurance went significantly up. Talking with an adjuster, Companies were buying hailed properties, holding them for a year or two, switching Insurers, then making a claim, when another hail storm came through.

f. Business Income loss is 24 months. If you think about the time it takes you to clean up and repair. Then go through rent up phase, the 24 months is pushing it.

g. Between the “Replacement” cost $2,100,000 and the Pollution Clean up and removal $100,000; it looks like I am covered, with an all in cost of $1,800,000. If you back out the cost of land $1,800,000 less $200,000= $1,600,000.

Followup points:

1. I need to check if the “Replacement” cost covers clean up also. If a tornado was to hit our operation, the $100,000 would not cover removal.

2. I need to check if the $100,000 cleanup and removal is just for Pollution or does it cover material debris.

3. If you see any holes in coverage or other followup items, please comment. Also expand on any insurance shortfalls you have had through a claim process. Greatly appreciate that.

It could easily cost $300,000 in clean up, debris haul/disposal, security guard during cleanup, etc. Make sure your insured beyond just replacement costs. Also claim as much as possible. Your roofs might look good, but they might leak later.  Will do a separate topic on going through a Flood.