Premises liability exposure is limited due to lack of public access to the storage facilities. Customer access should be limited to specific waiting areas, which should be kept clean, dry and free of obstacles. Proper attention to housekeeping is needed to prevent trips, slips, and falls. Contracts with transportation and storage providers may expose the operation to additional liability.

The facility may have a railroad sidetrack or dock. An employee should verify that no one is in the path of an incoming or outgoing train. Railroad tracks and conveyors can be attractive nuisances. The premises should be enclosed by fencing with “No Trespassing” signs posted. Packing or unpacking at customers’ premises could result in bodily injury should objects fall on customers, or damage to customers’ property.

Workers compensation exposure can be extensive, especially if packing is done. Back and lifting injuries such as hernias, sprains, and strains are common and have high-severity potential. Workers should be trained in material lifting and the property use of conveying devices. Forklift operators must be properly trained. Shelving must be stable to prevent stored goods from falling onto workers. Housekeeping is critical. If the facility has a dock for loading onto barges, the elevator may need U.S. Longshore and Harbor Workers coverage in addition to workers compensation.

Property exposures are high due to the combination of ignition sources such as faulty or inadequate electrical wiring and equipment malfunctions, open construction, and large quantities of combustible stored items and packaging materials. All wiring must be up to code and adequate for the operations performed. The stored goods may have heavy fire loads. There must be adequate aisle space to allow firefighters to carry out their duties.

When another party does the packing, the warehouse will not know the type of property being stored or its potential fire hazards. If rack storage of crates and boxes is used, there should be sprinklers in the racks. The sprinkler heads must be located high enough to avoid accidental contact with forklifts, but with enough clear space from the racks to allow unobstructed operation in the event of a fire. In order to reduce catastrophic losses, firewalls and fire divisions should separate the storage areas. Good housekeeping and fire controls are critical. Smoking should be prohibited. Forklifts should be refueled in a separate, ventilated area away from combustibles. Stored products may be a target for thieves.

Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Crime exposure is from employee dishonesty. Background checks, including criminal history, should be performed on all employees handling money. Storage facilities operations involve a number of transactions and accounts that can be manipulated if duties are not separated. Regular audits, both internal and external, are important in order to prevent employee theft of accounts.

Receipts must be provided for all payments and compared to money received. If packing or unpacking services are offered, drivers, loaders and unloaders will have access to customers’ premises, increasing the exposure to theft of customer property or customer identity theft.

Inland marine exposures include accounts receivables, computers, contractors’ equipment, goods in transit, valuable papers and records, and warehouse operators’ legal liability. Contractors’ equipment includes forklifts, cherry pickers, and hand trucks used for moving stored items.

Goods in transit coverage is needed if the operation includes pickup and delivery of customers’ goods. Warehouse operators’ legal liability will depend on the contract between the facility and its customers, but should spell out who is responsible for damage to stored goods. Any items in storage must be marked to prevent incorrect release. All data should be duplicated and placed off site for easy replication.

Business auto exposure can be high if pickup or delivery services are provided. Children may be present during loading or unloading operations, requiring additional caution. All drivers must be well trained and have valid licenses for the type of vehicle being driven. MVRs must be run on a regular basis. Random drug and alcohol testing should be required. Vehicles must be well maintained, with records kept at a central location.