By Jessica Lamoureux
In the blink of an eye, you could be facing a disaster at your self-storage facility. Whether it be a natural disaster such as flooding, hurricane, tornado, wind or hail, or a man-made event such as arson, burglary, vandalism or a pollution-type exposure, a catastrophe could cripple your operation. Creating a disaster-preparedness plan will not only save you time and money, it could be the key to keeping your business afloat.
Creating Your Plan
A good disaster plan starts with a list of emergency contacts including the local fire and police departments as well as your insurance agent, electrician, plumber, and HVAC contractor. In addition, keep an updated list of employees, tenants and vendors readily available. This information should be backed up and retained off site. A site map or diagram, building plans, and bank-account records should also be kept at an off-site location.
For employee safety, maintain an emergency kit that includes blankets, a fire extinguisher, first-aid essentials, battery-operated lights, a radio, water, a whistle and basic tools. You also need to plan for disruption to your utility services. Determine which ones are necessary for continuing your business (for example, phone) and contact your local provider to see what back-up options are available.
To prevent arson, vandalism and burglaries, consider installing perimeter fencing of at least 6 feet high as well as a video-surveillance system with a sign advising the facility is being monitored. Central-station burglar and fire alarms are always recommended, especially for the main office.
Contact your local disaster-restoration company to see if it offers a preparedness assessment or related tools. For example, ServPro offers an Emergency Ready Profile you can access immediately through a mobile app. The profile stores critical information that can be provided to authorities such as the location of shut-off valves and areas of priority. Having this information at the ready can help minimize business interruption.
All of the items above should be part of your business-continuity plan and updated regularly. You can review and create your own plan at ready.gov. It should be shared with your insurance agent, who’ll use the information to present your facility to underwriters for the most competitive insurance policy. The more details you provide regarding your disaster preparedness and safety features, the better they can justify the application of credits to your insurance premium.
Establishing Protections
After a loss, your lease agreement is your first line of defense against lawsuits. As such, it should be written or at least evaluated by an attorney who specializes in self-storage. Your lease should be reviewed and updated regularly, especially when there’s a change in your state’s lien law.
Attorneys will advise that a value limitation is an important part of a rental agreement. Another way to protect yourself from disgruntled tenants is to offer a strong tenant-insurance program. After an incident, it’s much easier to make a phone call to a tenant who’s insured than one who declined insurance at lease signing.
For your property and liability insurance, it’s important to work with an agent who understands the storage industry. They’ll recognize the need for coverages such as business income with extended periods of indemnity, customer-goods legal liability, wrongful-sale liability, hazardous-content removal and pollution insurance.
Responding to Disaster
Access to your storage facility should be restricted if there’s an extreme weather situation or other disaster. Only emergency personnel should be allowed on site. If there’s a fire, no matter how small, it’s important to call the fire department immediately and evacuate the premises. All employees should be trained on the proper use of fire extinguishers; however, staff should never try to fight a fire that’s spreading.
When the facility is safe to approach, it’s your duty to protect your buildings from further damage. Secure the property, contact local authorities and call your insurance agent to report the claim in a timely manner. Take photographs and document all loss.
According to the Federal Emergency Management Agency, 40 percent of businesses don’t reopen after a major disaster. The Small Business Administration indicates that an additional 25 percent fail within two years following the loss. When we take the statistic from the magazine “Claims Journal” that 75 percent of small businesses don’t have a disaster plan, these numbers provide a valuable lesson. Planning ahead and taking the steps to develop a disaster-preparedness plan is the key for business continuation.
Jessica Lamoureux is a senior account executive of commercial insurance for Storage Insurance Brokers, a division of Bruen Deldin DiDio Associates Inc., an insurance and bonding agency and broker. She’s also president of the Connecticut Self Storage Association and a former board member of the Brewster Chamber of Commerce. For more information, call 860.372.4159; e-mail [email protected]; visit www.storageinsurancebrokers.com.
