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Key Agent Newsletter
Summer 2017



. Planning Ahead For Hurricane Season
. Lightning Damage: Identify It, Respond To It, Prevent It
. Insurance Requirements for Contractors and Tenants

Insurance Requirements for Contractors and Tenants

HailTenant insurance programs have long been a standard offering at self-storage facilities. But, when it comes to protecting your business, making sure that tenants are insured is just the beginning.

With self-storage occupancy rates on the rise, the industry is experiencing a wave of optimism that is very welcome after the long years of the recession and recovery period. As a result, the self-storage industry is seeing increases in new facility development, expansions of existing properties, and conversions of existing non-storage properties into self-storage facilities. This renewed focus on construction and development is an excellent opportunity to examine insurance issues that are critical to your operation.

If you have contractors working on your property, it is important to require that they provide evidence of insurance, to include liability coverage, at adequate limits. One of the principles of risk management is risk transfer, which involves shifting a risk from one party to another. If you permit uninsured or underinsured contractors to do work at your self-storage facility, you potentially are assuming the risk for their personnel's actions that may result in property damage, theft, negligence, injury or other acts. In other words, you could very well end up with a multi-million-dollar insurance claim or lawsuit on your record.

In addition, it is a prudent strategy to require that your tenants also provide evidence of insurance while they occupy rented space at your facility. Commercial tenants, those using their rented storage space for business purposes, should be required to provide evidence of property and liability insurance coverage at adequate limits for reasons similar to those that apply to contractors. Residential (non-commercial) tenants should be required either to provide evidence of insurance for the items stored in their rented storage space or to purchase the tenant insurance coverage offered at your facility.

Resident managers are becoming less common in the self-storage industry due in part to the prevalence of automated, self-service technology and mobile phones. If you are thinking about offering the manager's apartment at your facility for rent, be sure to follow the risk transfer guidelines by requiring that any resident living on your property provide evidence of insurance to cover their personal possessions and liability exposures.

If you have questions about requiring insurance in any of these scenarios, your independent insurance agent and legal counsel are excellent resources. They will be happy to work with you to provide recommendations and assist you in avoiding unexpected and undesirable, and potentially costly, exposures that could negatively affect your valuable business investment.


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MiniCo Insurance Agency, LLC
10851 N. Black Canyon Highway, Suite 200, Phoenix, AZ 85029
California License # 0H04984

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