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Self-Defense Tips for Self Storage Operators: Tenant Insurance and Catastrophes

Written by: Mario Macaluso Posted: 4/18/2017
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As a self storage operator, you do what you can to minimize every risk of loss. Catastrophe losses – losses that impact your ability to remain open for business – are unpredictable. Some examples of catastrophe losses include:

  • Hurricane wind losses
  • Water surge from named storms losses
  • Brush fires
  • Tornados
  • Flood from rain

Understanding what these losses are and your exposure to an event can help you prepare your business for one of these events. You’ll want to familiarize yourself with the role your insurance provider will play in the case of a catastrophic event.

Commercial Insurance: You can help protect your business from these perils with an appropriate commercial insurance policy. Business Property Insurance will generally cover damage resulting from hurricane wind, water surge, brush fires and tornados. Since flood is generally an exclusion of Business Property Insurance, you may determine you need a separate flood insurance policy. You’ll want to determine the blanket coverage amount you need for your on-site buildings, fences, roadways and equipment.

Another valuable consideration is Business Interruption Coverage. This would protect your business income should you be out of operation for a time. Additional enhancements, such as debris removal, may be worthwhile in the case of these natural disasters. Extra Expense Coverage is an enhancement that will help to pay the costs to return your business to its standard operations after a loss event.

Research your market for coverage options. Based on the range of your commercial insurance needs, your coverages will likely be rolled into a Business Owners Policy (BOP) or a Commercial Multiple Peril policy (CMP). From there, you can determine what additional coverage enhancements your loss exposure requires. You can enhance these basic commercial insurance options with protections against crime, employee practices, personal injury and data compromise, as you see fit.

Tenant Insurance: Help your tenants protect their stored goods by requiring that they carry insurance coverage. Or, in a state in which it is not legal for Operators to sell insurance, use a product that automatically covers your tenants. Select your tenant insurance provider well, as they ought to help you navigate a catastrophic event. SBOA Tenant Insurance, rated Best Tenant Insurance product by Inside Self-Storage for the past four years (2013-2016), aids its self-storage operators throughout all stages of their loss experiences.

In October 2016, Hurricane Matthew caused significant damage to a SecurCare Self Storage facility in Savannah, GA. SBOA Tenant Insurance initiated proactive communications to its operators in Georgia about insurance operational procedures during the storm and how to notify SBOATI in the case of loss. SBOATI was able to expedite the claims process by opening claims for tenants in advance when SecurCare provided the list of 76 affected units.

“When disaster strikes, we’re glad to have SBOATI as our insurance partner. In the end, it’s not just our benefit – it’s for our tenants too” stated David Cramer, President of SecurCare Self Storage.

“The process was quick and easy. Our facility managers submitted one loss report for all damaged units and the SBOATI adjusters were pleasant and helpful,” said Marty Gallagher, President of Metro Self Storage when their Staten Island facility suffered a severe fire loss in January. SBOATI opened claims preemptively for all 53 tenants in affected units. These claims can be handled efficiently because SBOATI has streamlined the claims process, given the catastrophe.

Not all loss is preventable, but it certainly pays to ensure you secure your self storage facility in every way possible. By all measures, this includes securing a tenant insurance partner that will serve you well in catastrophic events. For more information on this, contact Mario Macaluso to find how SBOA Tenant Insurance can work for you: MMacaluso@SBOATI.com.

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