Safeguarding Your Business Property Stored Off-Site

Do you have business property or equipment stored away from your business premises?

As your business grows, so too might your need for additional storage space. Whether it’s for excess inventory or surplus equipment, utilizing off-site storage can provide a practical solution. But how does this setup impact your commercial property insurance? This article delves into ensuring that your off-site stored business property is adequately covered.

Understanding Commercial Property Insurance Basics

Typically, commercial property insurance covers business assets located at the premises listed in the policy. However, if your business stores property at another location—like a storage unit or a rented space—this property may not be automatically covered under your primary policy. It’s crucial to review your policy’s specifics or speak directly with your insurance provider to understand the scope of your coverage for off-site stored items​ .

Short-Term vs. Long-Term Off-Site Storage Needs

For short-term storage, many insurance policies might automatically cover off-site property for a limited time, often 60 to 90 days. Confirming this with your business insurance provider is essential as terms can vary significantly. For longer storage durations, you’ll need to make specific adjustments to your policy, such as specifying the off-site location and the stored items’ value​​.

Examples of Business Scenarios with Off-Site Storage

• Contractors Storing Equipment in a Rented Garage: Many contractors store expensive tools and machinery in rented facilities not located at their primary business address. For instance, a construction company might rent a garage to store heavy machinery and equipment during the off-season. This arrangement requires a specific look at insurance coverage since items stored off-site are exposed to risks like theft, vandalism, or environmental damage.
• Retail Businesses Using Off-Site Storage Units for Inventory: Retailers often have to manage excess inventory, especially during peak seasons. Renting a storage unit to keep additional stock can be cost-effective. However, these units can sometimes be targets for theft.  Or they might be damaged due to weather incidents or other unforeseen events. Ensuring these items are covered under your commercial property insurance, or possibly a supplemental policy, is critical to avoid significant financial losses.

Risks and Coverage Limitations

The risks associated with storing items off-site include specific types of damage such as fire or theft, while commonly excluding others like flooding or general wear and tear. Moreover, insurance coverage is typically limited by dollar amount and duration, which means that only a predefined value of your stored property is protected for a set period​ ​.

Additional Protection with Specialized Policies

For comprehensive protection, consider specialized insurance solutions like inland marine insurance. This type of insurance is designed to cover property in transit or stored away from your primary business premises, filling any gaps left by standard commercial property insurance and offering peace of mind for all your business assets, regardless of their location​​.

Proactive Steps for Securing Adequate Coverage for your Business Property Stored Off-Site

1. Evaluate Your Storage Needs:  Regularly assess the type and value of items you store off-site.
2. Consult Your Insurance Agent:  Openly discuss any changes in your storage needs to adjust your policy accordingly.
3. Consider Extra Coverage:  Depending on the nature and value of the stored items, additional policies like inland marine insurance might be necessary.

Conclusion for Business Property Stored Off-Site

Using off-site storage is a practical solution for many businesses.  But it requires meticulous planning to ensure that these assets are fully protected under the right insurance policy. Be proactive and regularly review your insurance coverage with your insurance agent.  Doing this can safeguard your business from significant financial and operational setbacks due to inadequately insured property.

Next Steps

For businesses considering or already using off-site storage, talk to your insurance agent.  They should offer a comprehensive review of your current coverage.  Tailor your insurance to meet your specific needs. This ensures that every piece of your business property, no matter where it is stored, is accounted for in your policy.