Two insurance terms on a self storage term sheet that are easy to misread as tenant coverage

Taking those in order.

Loss of rents, sometimes written as business income coverage, pays your rental income while the buildings are unusable after a covered loss. If a windstorm takes the roof off two buildings and 60 units have to be emptied for four months, the property coverage rebuilds the buildings and the loss of rents endorsement replaces the rent you didn't collect. Lenders ask for it because that income is what services the loan.

Customer goods legal liability covers claims from tenants over damage to their stored property in situations where you're found responsible, a roof leak or a broken gate that let someone in. Your lease disclaiming responsibility helps and doesn't end the argument, since tenants sue anyway and defense costs money. You'd also carry property coverage on the buildings, general liability for injuries on site, and usually an umbrella above both.

The protection plan is the part to be careful with. Some of those programs are insurance products, and selling insurance generally requires a limited lines or self-storage insurance license depending on the state. Others are structured as a contractual reduction of the tenant's liability under the lease, which many states regulate differently. Which one the seller is running determines what you have to do to keep collecting that $11, and a few states have taken a hard line on protection plans that look like unlicensed insurance sales. That's a question for an insurance broker who writes storage and, if the answer is unclear, a licensed attorney in your state.

While you're checking state rules, read your state's self-storage lien statute too. The notice periods, advertising requirements, and how you're allowed to run an auction on a delinquent unit are all set there, and they differ enough that a lease copied from an out-of-state operator can be unenforceable.