One of the most common losses a Self Storage facility owner/operator is exposed to can be covered by sale and disposal legal liability coverage. Each state has its own laws and specific procedures on how to deal with delinquent tenants and what is allowed when removing or discarding their stored goods in your units. If any of the steps required are not followed to the letter of law, this leaves you, the facility owner, open to a possible loss. Our policy includes coverage for this exposure.
Some of the simplest human errors can cause losses of this type. If a unit number is transposed, then the incorrect unit can be auctioned, and that tenant can sue for their loss of goods. Another possible cause of loss could be that the notice of intent to sale a unit is not properly posted, or the delinquency letters are not mailed on time per the state requirements.
Another type of Sale and Disposal loss we see is when a tenant is active in the Military. There are special laws protecting Military Personnel regarding what procedures must be followed if they are deployed. Make sure your lease agreement has a question regarding any active or reserve Military status so you can avoid this possible pitfall.
The best way to avoid this type of loss to review your state lien laws and stay abreast of any possible changes to the law. A good way to do this would be to join your state self storage association or the national self storage association.
Sometimes even when you follow all the laws and requirements a tenant will still file a claim or hire legal counsel stating that you improperly sold or disposed of their goods, our policy will protect you! Our defense costs are outside the limits, so we will pay for your defense and the limit of coverage you choose will pay any damages.
Our policy includes coverage at $10,000, but this can be increased up to $1,000,000. This is an aggregate (policy term) limit so make sure you have a high enough limit to protect from possible multiple claims. A good rule of thumb is to look at how many sales of units you have in an average year but discuss this further with your self storage insurance agent to make sure you are correctly covered. Contact our office today to begin building your policy.
This page does not guarantee coverage or limits of the policy, please review your policy for full coverage details.
