Self-Storage & Storage Facility Insurance
A self-storage facility is a building full of other people's property, and the operator generally does not know what is in it. That is a key characteristic of this class, and it is what separates it from an ordinary warehouse where the occupier at least knows what they are storing.
Fire is a significant exposure. Units are packed to the roof with mixed goods, many of them combustible, separated by partitions rather than compartment walls, and a fire that starts in one unit can spread rapidly without adequate compartmentation and fire protection.
Liability for the goods themselves is the commercial question. Most operators contract on terms that limit or exclude liability for customers' property and require the customer to insure it, and the enforceability of that depends on the terms actually being incorporated rather than merely printed, and may require legal advice.
We can advise self-storage operators, container storage sites and businesses offering storage as part of another service on insuring the building, the operation and the liability for goods in their care.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Not knowing what is stored
Customers declare contents loosely and store what they like. Paint, fuel, batteries, aerosols and business stock all appear in units let to householders, and the operator discovers it after a fire rather than before.
Fire spread between units
Internal partitions divide space rather than resist fire. Once a unit is alight the fire spreads laterally and into the roof void, which is why sprinkler protection and compartmentation matter far more here than in a building with one occupier.
Liability for customers' goods
Where the operator's terms do not effectively exclude liability, or where damage results from the operator's own negligence, claims come from every affected customer at once. A single fire produces dozens of claims rather than one.
Access control and theft
Customers hold their own keys and come and go, often outside staffed hours. Theft from units, disputes about who entered and when, and goods removed by someone other than the depositor all depend on access records and CCTV retention.
Unattended out of hours
Most facilities are unstaffed for much of the week. A fire or a leak overnight runs until detection raises it, which makes monitored alarms and remote detection central rather than optional.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure, internal partitioning, doors, roller shutters and site works on a reinstatement basis. Debris removal is significant because clearing a burnt facility means removing the remains of hundreds of customers' goods.
- Structure and internal partitioning
- Roller shutters and unit doors
- Site works, fencing and access systems
- Debris removal and professional fees
Goods in your care
Liability for customers' property while stored, to the extent the operator is responsible for it. The limit needs to contemplate a total loss across many units rather than the value of any single one.
- Customers' goods while in store
- Aggregate limit across the site
- Responds where terms do not exclude
- Defence of claims from depositors
Public and employers' liability
Injury to customers moving goods, to visitors and to staff. Customers handling their own heavy items in shared corridors and lifts is an ordinary daily activity here and a common source of injury claims.
- Injury to customers on site
- Lifts, trolleys and loading areas
- Employers' liability, legally required
- Limits typically £5m or £10m
Business interruption
Income lost while the facility cannot operate. Recovery is slower than the rebuild suggests, because customers whose goods were destroyed do not return and new lettings have to be rebuilt from nothing.
- Income during closure
- Indemnity period of 24 months or more
- Rebuilding the customer base
- Increased cost of working
Customers' own insurance arrangements
Many operators require customers to insure their own goods, sometimes through a scheme offered at the counter. Where a scheme is offered, the regulatory position around arranging it needs to be right.
- Requirement for customers to insure
- Scheme cover offered at point of sale
- Clear terms on where liability sits
- Regulatory position on arranging cover
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Construction, and in particular the core of any composite panels used
- Sprinkler protection, its design standard, and detection coverage
- Number of units, their size, and how the building is compartmented
- Prohibited goods list, and how it is communicated and enforced
- Access control: staffed hours, out of hours entry, CCTV and its retention
- Terms of storage, and how liability for goods is dealt with in them
- Whether any business stock, vehicles or containers are stored
- Claims history for fire, theft and customer goods claims
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Sprinklers and compartmentation
One of the main factors insurers consider. A sprinklered facility with proper compartment lines rates very differently from an open span building divided by mesh and partition, because the difference is between one unit lost and the whole site.
Construction and panel core
As with any industrial building, combustible cored panels narrow the market sharply. Documented mineral wool cores are worth producing at quotation.
What is accepted for storage
A facility taking only household goods rates better than one accepting business stock, vehicles or trade materials, because the fire loading and the values both rise.
Security and staffing
Staffed hours, monitored alarms, CCTV with meaningful retention and controlled out of hours access all improve terms on a site that is empty most of the time.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Prohibited goods stored anyway
Fuel, gas, chemicals, fireworks and lithium batteries are excluded by most storage terms. Their presence does not automatically void the policy, but it will feature heavily in how a fire claim is investigated.
Customers' goods where liability is excluded
Where the storage terms exclude liability and are properly incorporated, the customer's loss is theirs. This is the intended position, and it is why the wording of the terms matters as much as the insurance.
Theft without evidence of entry
In a facility where customers hold their own keys, a theft claim with no sign of forced entry is difficult. Access records and CCTV are what make the difference, which is why retention periods are asked about.
Gradual damage in store
Damp, condensation, mould and infestation affecting stored goods are usually excluded. On long term storage of soft goods this is a frequent source of customer complaint that insurance does not answer.
Common questions
Do we need to insure our customers' goods?
That depends on your storage terms. Most operators require customers to insure their own goods and limit their own liability, but the limitation only works if the terms are properly incorporated into the contract. You still need cover for goods in your care for the situations where your own negligence causes the loss.
Can we offer insurance to customers at the counter?
Many operators do, but arranging insurance is a regulated activity and the basis on which you do it needs to be right. It is worth getting the arrangement checked rather than assuming that offering a scheme alongside a storage contract falls outside the rules.
What happens if someone stores something prohibited?
It will be central to how any fire claim is investigated, so the prohibited goods list needs to be in your terms, visible on site and enforced in practice. Insurers understand you cannot inspect every unit, but they do expect the prohibition to be real rather than decorative.
Are sprinklers essential?
Not legally, but on a facility of any size they largely determine what terms are available. The risk is lateral fire spread through a building full of mixed combustible goods, and sprinklers are the only protection that reliably addresses it.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.