If your self-storage facility has a manager – and they have a car – there’s a whole level of liability that you have to be protected against. In this Self-Storage University podcast we’re going to review the topic of how to properly mitigate the risk of managers driving their way into problems for your property. As you’ll see, there’s much more than just gas prices to worry about.
Episode 47: Cars And Managers Transcript
Frank Rolfe: If you own a self storage facility and you've got a manager and they've got a car, there's a lot more to worry about than the price of gasoline. This is Frank Rolfe for the Self Storage University podcast. We're gonna be talking about cars and managers, which can be a very, very dangerous combination as a self storage facility owner. Here's the problem, if you have any duties that your manager must perform for you that include the use of an automobile, then the entire time that they're doing that duty, if they have a car accident, you are in the middle of that litigation. Let's say they're gonna go out and make a deposit at the bank for you, let's say they're gonna go out and buy some highlighters for the office, whatever the case may be, even just driving once around the property. If they're in that car and they're behind the wheel and they were on official company business, whatever happens will be considered to be an official company problem liability. So how do you mitigate that risk? How do you try and get some of their driving danger off of your plate? Well, the first thing you need to do, is you need to get a hired non-auto liability policy for your storage facility.
Now, what is that? That is a policy that covers what happens when that manager is out driving their automobile and if they have an accident, then it covers you, the liability for that occurrence. These are not super expensive policies to buy. They cost typically around $300 to $500 a year, and if you think of the amount of risk that that will protect you from, it's an absolute bargain. But it's still not enough. You can get that policy, but that still isn't the entire movie. The next thing you have to make sure is that your manager has in effect personal automobile insurance on that car, because here's what happens, let's assume that your manager decides to go out to the mall and on the way to the mall, after hours, driving the car, they hit a pedestrian. Well, they're going to claim that they were just out there really on company business, they were going out to scout the competition, they were driving to other self storage properties to see how you compare.
And as a result, they're gonna try and offload that liability from themselves over to you, and if they have insufficient insurance or no insurance, you better believe the personal injury lawyer for the pedestrian that got hit, will be more than happy for them to try and attach that claim to you and your business. You've got to make sure that they have enough auto insurance, and if they hit something or someone, that they have some kind of deep pocket for someone to go over, 'cause if they don't, just guarantee they're gonna be coming after you instead. You also need to make sure that you have your manager sign some kind of corporate auto-use policy. That policy will probably contain provisions such as the fact that they are not allowed at any time to use a cell phone, not to text, not to call.
Things like that, that you want them on record of having agreed to, so if they'd ever do have that accident, you can blame it on them, you can blame it on the fact that they were not following your company policy and who knows, it might do you some good. They would actually be afraid of violating the policy, they might lose their job, and as a result, they drive safer. And the more you can make them drive safer, the better you will be. Also, you gotta make sure if you're gonna have a manager who's driving a car, they have got to have a decent driving record. You cannot hire a manager and feel you are protected from liability, if in fact they have a lengthy rap sheet of DUIs, how will that ever work? They're driving to the bank to make the deposit, but they've been drinking before they get in the old automobile, and on the way, they hit a car, they hit a person, they hit a building. What were you thinking, having someone that's giving you a great amount of liability to shoulder, who isn't even a qualified driver? There's self storage facilities out there where people are unaware their managers don't even have driver's licenses, they've been taken away, past violations, non-payment. So you've gotta make sure that your manager has all of the qualifications to drive. Now who vets them on all these things?
How do you get this done? Well, it's a good idea for you to go to your insurance agent and say to the agent, "You know what, I was kinda... I'm kind of worried. I was thinking... I heard this podcast, and do I have coverage on my manager when they're driving around running errands for the storage property?" And you'll be horrified to hear them say, "No, you really don't, actually, but I can get it for you." Get that insurance and then dig deeper, say to them, "Okay, the insurance is good, but what else can I do to help mitigate my problems?" And whatever they tell you, whatever that lengthy list is of getting that manager's insurance, their personal insurance records and all the various items, follow each of those steps and document it. And if need be, make your insurance agent an active participant in that investigation, because at the end of the day, if your manager does have an accident, you wanna be the good guy. You want the complete paper trail showing you did absolutely everything by the book, because if you don't, the worst thing that could happen to you is losing your insurance. And you'd feel really stupid, losing your insurance over some silly accident that your manager made, potentially not even on company time, that could have been easily avoided if you had just proactively worked around the insurance system and making sure it was safe for them to drive a car.
Now, if you don't have a manager, if you own a facility but it doesn't have a manager, you yourself need to, again, make sure that you have the proper insurance, it is possible that if you're doing something at the storage facility that's not of your own personal use, and you do not have any form of business insurance, you might not be covered. So even then, even if you don't have a manager, it still would behove you to talk to whoever is carrying the insurance on your storage facility to make sure that you yourself are correctly papered regarding insurance. Because we live in a very, very litigious America today, and the last thing you wanna do is to be an easy target for a personal injury lawyer or the unwitting Daddy Warbucks, Mr. Moneybags, for somebody, even though you did nothing to try and pin their dreams of some big insurance settlement.
You have to really protect yourself, and many people out there do not realize the scope of the liability and the amount of a claim of a car accident that can come from something as innocent as a manager simply driving over to the bank. This is Frank Rolfe for the Self Storage University podcast. I hope you enjoyed this. Talk to you again soon.