Insurance for inventory in self storage: what's covered and what to ask

Running a business means protecting the things that keep it running. For many small businesses, a self storage unit is a flexible place to keep stock, tools or equipment. But stored goods face risks too, and a loss can set a business back.

This guide explains how insurance for inventory in self storage works, what Goods in Storage insurance can cover for a small business, what it doesn't cover, and the questions worth asking before you choose a policy.

What is inventory insurance for self storage?

Inventory insurance for self storage is cover for business goods, such as stock, tools or equipment, while they are kept in a storage unit away from your main premises. A business policy built around your shop or office may cover goods there, but offer less, or nothing, for goods kept somewhere else.

For example, a small retailer might keep seasonal stock in a storage unit, or a tradesperson might store tools and materials between jobs. If that stock or equipment is lost or damaged, replacing it could be costly.

Why businesses need to check their cover

Many business owners assume the storage facility covers their goods. In practice, storage agreements commonly limit what the facility is responsible for, and a facility's own insurance is generally arranged for its own business. Most facilities expect customers to arrange their own cover.

Think about what your stored goods mean to your business. Retailers rely on stock to meet demand, tradespeople depend on their tools, and online sellers may keep most of their inventory in one place. It is worth knowing, before anything happens, whether your current policy covers goods in storage and for how much.

What Goods in Storage insurance can cover

We arrange Goods in Storage insurance for household goods, personal effects and contents, including those used in a small business, while they are stored at an SSIA approved self storage facility.

• What it covers. Physical loss or damage directly caused by the insured events listed in the policy schedule: accidental damage, fire, lightning, impact, explosion, earthquake, tsunami, aircraft, riots and strikes, malicious damage, rainwater, storm or tempest, and theft following forcible entry. Your own policy schedule confirms your cover.
• Where it applies. Inside your locked storage unit or secured area at the facility shown in your schedule.
• How much. You choose the sum insured. It is up to you to make sure it is enough to repair or replace your goods.
• How long. You choose the number of months, up to a maximum of 12 months. Policies are not renewable, so for longer storage you take out a new policy from the date the first one expires.

If you make a claim that is accepted, items you list individually are settled at the value agreed and shown in your schedule. Other items are settled at their market value immediately before the loss, not new for old. The excess is $250 for each claim, as shown in your policy schedule.

Read more about cover for business stock in storage.

What it doesn't cover

Some exclusions matter more for businesses. Goods in Storage insurance does not cover:

• Lost profits and delays. Consequential loss, including loss of profits, loss of contract or delay, is excluded, as is legal liability of any kind. If that matters to your business, talk to your business insurer.
• Flood, meaning water that has escaped from a river, creek, lake, dam, reservoir or canal. Rainwater is one of the insured events, but rainwater is not flood.
• Poor packing. Damage caused by packing that is not good enough to withstand normal storage.
• Unexplained loss. Loss, disappearance or shortage that cannot be explained.
• Theft by people close to you, meaning an immediate family member or your own employee.
• Wear and tear, gradual deterioration, rust, mould, mildew, insects and vermin.
• Goods on the move. Cover does not apply in transit, or while goods are being loaded or unloaded.

Some types of stock can't be insured at all. They include flammable liquids and gases, chemicals, paint, tyres in bulk, tobacco, most alcohol and perishables, as well as vehicles, most boats, money and bullion. The Target Market Determination (TMD) (PDF, opens in a new tab) has the full list.

Questions to ask before you choose cover

Not every policy offers the same protection. Whichever insurance you're considering, ask these questions. We've added how they apply to Goods in Storage insurance.

1. Is my business eligible? Goods in Storage insurance is designed for household goods and contents, including those used in a small business, at an SSIA approved facility.
2. Which items are excluded? Check the list of excluded goods against what you actually store. Paint, chemicals, fuel, bulk tyres and perishables are common stock types that can't be covered.
3. What is the limit? You choose the sum insured. Use up-to-date stock values, and check jewellery, watches and artworks against their set limits.
4. How are items valued at claim time? Listed items are settled at the agreed value shown in your schedule; other items at market value immediately before the loss.
5. Does the policy cover goods in transit? Goods in Storage insurance does not. If you move stock regularly, check what cover applies while it is on the move.
6. What conditions apply? Goods must be in your locked unit at an SSIA approved facility. You must keep an accurate, itemised inventory, take reasonable care of your goods and pack them to withstand normal storage.
7. What happens if I need to claim? Contact the Claims Department named in the PDS directly, as soon as you reasonably can. You do not need to contact SSIA first. Don't arrange repairs or replacements without approval, other than emergency repairs. You may be asked for a signed, sworn proof of loss with receipts and records. Our guide to making a claim has the claims phone number and email, and explains the steps.

Asking these questions early helps you find any gaps before they matter.

How to reduce the risk to your stock

Insurance is one layer of protection. These habits help reduce the risk to your stored goods, and some of them are policy conditions:

• Use a good-quality lock on your unit.
• Keep a detailed inventory with photos, quantities and receipts, and update it when stock comes and goes.
• Use shelving to keep stock off the floor, and store fragile items securely.
• Consider a climate-controlled unit for sensitive materials.
• Review your sum insured when your stock levels change, and contact SSIA if your cover needs to change.

Choose your sum insured and months of cover

Your inventory represents the money, time and effort you've put into your business. Before you store it, check what your current policies cover, read your storage agreement, and consider cover designed for goods in storage.

At SSIA, we believe you're the best judge of what protection your stored items need. You choose the sum insured and the number of months. The terms are set out in the Product Disclosure Statement (PDS) (PDF, opens in a new tab), so read it and the TMD before you decide whether Goods in Storage insurance suits your business.