Incorporating Fire Prevention Into A Risk Management Plan

Fire is a serious concern for self-storage businesses and one of the costliest causes of loss for property owners and insurance carriers. In addition to the cost of repairs and lost income while spaces are unavailable to rent, the toll a fire can take on an operation can be devastating. The sight of a damaged, burned-out building can make it difficult to rent units to prospective customers, and current tenants may think twice about continuing to rent at the facility.

Wildfire is an annual problem in the western United States, but the risk of fire from other sources is a real threat at self-storage facilities across the country. It is critical that business owners take action to mitigate the potential risk of fire on their properties.

Rental Lease Wording

The nature of self-storage means that, for the most part, facility employees do not know what customers are storing within their units. This reality underscores the importance of the rental lease, which should include specific wording prohibiting the storage of flammable materials. However, the wording of the lease has little value unless the manager points out the prohibitions and communicates them directly to the tenant at the time of lease. Self-storage operators also may wish to require that tenants provide evidence of insurance such as a homeowner, renter, or property storage insurance policy or a general liability policy for commercial tenants.

Tenant Communication

Ongoing tenant education is a top priority when it comes to fire prevention at a self-storage facility, and regular communication to customers can go a long way toward mitigating the risk of fire on the property. Examples of tenant communication include the following:

  • Signage – Post “No Smoking” signs throughout the facility as well as signs reminding tenants that the use of candles or other open flame is prohibited on the property.
  • Bill Reminders – When sending out bill reminders by mail or email, include brief educational messages and safety tips such as a list of items that are prohibited from being stored (gasoline, paint thinner and propane) and reminders to drain fuel from lawn mowers, chain saws, gas generators, lanterns, and heaters prior to storage.
  • Hazard Reporting Hotline – Communicate to tenants that the business cares about their safety and needs their help to keep the facility safe and secure. Encourage them to report safety hazards to the facility via a hotline telephone number and/or dedicated email address. Whenever a tenant makes a report, be sure to follow up to thank them and let them know that the issue is being addressed.

Managers As The First Line of Defense

While it is certainly beneficial to recruit tenants to help identify safety concerns, facility managers are always the first line of defense. They need to be trained to be out on the premises with tenants and speak up if they see a hazardous situation such as someone smoking in a unit, using a space heater, or overloading a power strip. Managers should also be aware that frequent visits to a unit by a tenant is a reason to identify the purpose of the visit.

As with any risk, an insurance agent can advise the property owner regarding insurance options to help protect the investment. Schedule a policy review to discuss limits for property and liability coverages to include business interruption and umbrella to ensure that exposures from fire have been properly addressed.

Mike Schofield

President and CEO