By Raymond C. Berry

Insurance is one of the most important tools you as a business owner have to help you protect your valuable self-storage business investment. It is important to meet with your insurance agent on a regular basis to review your coverage as well as many of the particulars of your self-storage business. Being prepared for the discussion is also an important part of the meeting. The good news is that getting ready for a visit from an insurance agent is easier than you think.

The insurance agent will ask many questions relating to the nature and operations of your business. Most of these questions are related to safety, some questions are based on how you conduct your business operations, and others are just to get to know you a little better.

Property

Property questions are very important as a large part of the insurance costs are based on the details of your property. Be prepared to answer the following questions about your property:

Were the buildings originally designed for self-storage?
Is the construction of the storage buildings joisted masonry (brick or
cement walls with frame rafters and roof) or is it constructed of metal
frames and metal coverings?
Do the buildings have wiring, plumbing or insulation?
Do you have any special climate-controlled areas or specialty storage for
items such as wine, paper records or other sensitive or perishable
products?
Do you ever permit the storage of flammables, chemicals, pollutants or any
kind of waste?
Does the facility include outdoor storage for motorized vehicles including
campers, boats, motor homes and other recreational vehicles?
Is your facility fenced? If so, is the access gate controlled?
Do you use a sign-in/sign-out system or do you have a keyboard touchpad
or card entry system to control all visitors?
Are there animals on the premises (such as a dog)?
Do you operate business-owned vehicles?

Operations

What are your gross sales?
Do your sales fluctuate wildly from year to year, or do they show steady
growth and seem to be very predictable?
Do your tenants turn over 50% or 100% in a year, or do many stay for
close to the common three-year span?
Is it clearly posted that the facility is not responsible for tenants’ stored
property?
Do you advise tenants to obtain renter’s insurance?
Do you offer a tenant insurance program at the facility?
Are tenants allowed to operate businesses out of the storage units
(including manufacturing or assembly) or do repair work on vehicles?
Are the facility’s rules clearly posted so that they are easily understood
and followed? (Rules may include methods and timing of payments,
business hours, vehicle loading and unloading, and lock usage.)

Employees

Finding the best workers requires a little effort. Do you perform any kind of background checks, or are you familiar with your new workers before you hire them? It is a good idea to determine a prospective employee’s prior criminal history as well as any serious violations on his or her driving history. Background checks are cheap and easy to do now, but you must obtain the candidate’s permission prior to screening. Also, are you on the premises during all hours of operation, or do the managers run the business while you are absent? Keep in mind that your insurance agent will need detailed information about your employees to determine your need for Workers Compensation Insurance. 

Past Insurance Premiums

A history of your past insurance premiums is helpful for the agent to see if your business has grown or even if you are being fairly charged on your current policy.

Claims

Past claims are always of interest to an insurance agent, so be ready with detailed information. The agent frequently will need to provide explanations about past claims to the insurance underwriter who will take the information from the insurance application and generate a premium quote. Keeping detailed information about any past claims helps make for good risk management and could help future claims be avoided or controlled.

There is a great deal of pride in running a successful business that is profitable and grows. Remember that buying insurance is only one of many recognized risk-management techniques, and it is not the total solution to every business risk. A good insurance agent will have advice and ideas for other additional risk-management strategies.

Raymond C. Berry has been in the insurance industry since 1978 and is the owner of RCB Insurance Services based in Crete, Ill. RCB Insurance Services serves customers in Illinois, Indiana and Wisconsin. For more information, please call 708-672-1000.