Insurance is one of the areas where new self-storage operators most often underestimate their exposure. The risks in storage are real: customer goods can be damaged or stolen, a member of the public can be injured on site, a vehicle can damage a gate or barrier. Getting the right self-storage insurance in place before you open is not optional.
The exact cover required depends on your site, your business structure and your lease or ownership arrangements, but the following categories apply to almost every UK operator.
Public liability covers claims made against you by customers, visitors or members of the public who suffer injury or property damage on your site. For a storage facility with customer access, this is non-negotiable. Most lenders and landlords will require it as a condition of trading.
Cover limits of £2 million are common for small operators; £5 million or above is advisable for larger or busier sites. Premiums vary by site size, access arrangements and claims history.
If you have any employees, including part-time staff, employers’ liability insurance is a legal requirement in the UK. It covers claims from employees who suffer illness or injury as a result of their work. The minimum legal cover is £5 million.
If you own the property, you need buildings insurance covering the structures against fire, flood, storm damage, subsidence and malicious damage. If you lease the property, check your lease carefully: the landlord typically holds buildings insurance, but you may be required to contribute or to insure your own fit-out and fixtures.
Your own business contents, such as office equipment, security systems, signage and any vehicles, need separate contents cover. This is distinct from insurance for customers’ goods.
This is the area that causes most confusion and most disputes. The key principle in UK self-storage is that the operator is generally not liable for loss of or damage to customers’ goods, provided the terms and conditions make this clear and the customer has been given the opportunity to arrange their own insurance.
There are two common approaches:
Whatever approach you take, your terms and conditions must clearly exclude liability for customers’ goods and explain what the customer is responsible for insuring. Have these reviewed by a solicitor before you open.
If your site becomes inaccessible, due to fire, flood or an incident affecting the surrounding area, business interruption insurance covers the lost revenue during the period you cannot trade. For a storage business with fixed overheads, an extended closure without income protection can be serious.
General commercial insurance policies are not always well-suited to the specific risks of self-storage. Specialist brokers who understand the sector, including the Self Storage Association UK (SSA UK), which has relationships with specialist insurers, can often provide more appropriate cover at competitive rates. If you are not already an SSA UK member, it is worth joining for the insurance access alone.
Your insurance needs will change as your business grows. Adding a second site, installing new security systems, taking on staff, or increasing the value of goods stored all affect your risk profile. Review your cover annually and whenever you make a material change to the business.
The cost of adequate insurance is modest relative to the exposure it covers. Getting this wrong is one of the few mistakes in storage that can be genuinely unrecoverable.
Amax Connect puts your live Stora availability and prices straight onto your site, with bookings and payments built in. Take a look, or let us walk you through it.
