Licensed vendors and professional contractors are hired to provide materials, equipment, supplies and services. Vendors contribute to the daily operation of every facility. For example, trash collectors properly dispose of garbage. A lawn service may be used to cut grass and maintain landscaping. Pest control rids units of pesky rodents and insects. Roofers ensure tenants' stored property is protected from leaks, and mechanics fix malfunctioning gate controls. Are you adding a new building to your grounds? If so, you most likely hired a builder to do the job for you. These are just a few services used to keep your facility running and well-maintained.
When it comes to protecting yourself against liability for property damage and bodily harm, it is necessary to keep your storage facility in top physical condition and proper working order. Hiring vendors is a convenient, economical and usually appropriate way to repair and maintain areas of a facility. Keeping up on a facility's maintenance not only increases the quality of appearance but reduces your risk of liability as well.
When hiring a licensed professional contractor or vendor, you assume the work performed will be competent and the supplies used of professional quality. In most cases, this is true; however, bad fortune or coincidence can happen to anyone, even the most reputable companies. Accidents involving vendors that result in property damage or injury to tenants, employees or even the general public are known to happen. Hiring contractors that have proper insurance coverage is a good way to protect your facility from such vendor-liability exposures.
Vendor liabilities can be complicated and expensive if not handled properly. For example, let's say you hire a painter to paint the doors of your facility and he knocks over a ladder that happens to fall on a tenant walking by. The tenant, who was injured by the ladder whose clothes were ruined by paint, now wants you to pay for her medical expenses and a new outfit. Trying to determine who is responsible for the damages is complex. In this case, the tenant may hold you and your contractor liable on the grounds that you allowed dangerous conditions to exist at your facility or that you hired an incompetent vendor.
The best way for self-storage owners to protect themselves from vendor-liability exposure is to take appropriate measures when hiring professionals. Seek out reputable vendors and contractors who are licensed, bonded and insured. You should be able to get references from business associates or friends who have had good experiences with various companies. Also, request the vendor for hire to provide you a certificate of general liability and workers' compensation insurance.
A certificate of insurance is evidence the vendor is insured by a financially stable company and carries adequate amounts of insurance for the type of service being performed. The certificate should have information on the insurer, insurance agency, types of insurance, policy numbers, effective dates, limits, certificate holders and any special provisions it may have. Check to see the policy limits of the vendor's policy are at least equal if not greater than your facility's policy limits and that the policy effective dates are current. Hiring licensed professionals with proof of insurance may drastically reduce your liability (in terms of negligence) in a vendor-exposure claim.
Keep vendor certificates of insurance on file during projects and even years after project completion. This will benefit you most if an incident should arise after a project is completed. For example, you hired a roofer to replace parts of your roof and it turns out he used defective materials. Because of this, the roof caved in and damaged many of your tenants' stored property. If you have the certificate of insurance on file, you prove yourself to be non-negligent in the situation. You can forward the insurance information to your tenants so they can seek reimbursement for damaged property.
If you have vendors and contractors who provide services on a fairly regular basis, you may want to require them to name your storage facility as an additional insured on their liability policies. A huge benefit for being an additional insured is it provides your facility additional coverage. In addition, you will be notified if the coverage is cancelled for any reason.
In today's world, it is best to exercise caution when outsourcing services to vendors and contractors. Recognizing the risks associated with contracting professionals whether property damage, personal injury or negligence is an absolute step towards protecting your storage facility.
Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit www.vpico.com/universal.
