As a bailee, your business requires you to take charge of storing or handling goods. A position that, naturally, is open to potential exposures up to the full value of liability for any cargo that is lost or damaged while in your care. For this type of liability concern, bailee insurance offers the best protection. The purpose of this policy is to respond to any physical loss or damage to property while in your care, custody or control.
Bailee coverage is vital in instances where an item is lost or damaged and, as the bailee, you need to make reparations to your client. For example, a long-time customer entrusts to you items of high value that end up lost or damaged. Whether during transit or while in a warehouse, the policy will pay for any losses incurred.
Bailee coverage can differ from one policy to the next
Because bailee insurance is specialized, it helps to work with an insurer familiar with this type of coverage. It’s also important to note that not all policies provide the same coverage. While defense costs may be included, the amount must be taken into account in the event that a substantial loss, above policy limits, takes place. This is not all that unusual when a claim for loss or damage arises. It would be unfortunate if you were to exceed the monetary amount of damages awarded. As a bailee, you could be responsible for issues not always covered, for instance, debris removal, which is the cost to have any damaged property removed from your premises and properly disposed of.
Liability of bailees
If you are temporarily storing property for your customers in a neighboring warehouse and the bailment is to the mutual benefit of both parties, the bailee is then referred to as a “bailee for hire.” When a bailment involves the transfer of property where no compensation is involved, it’s referred to as a “gratuitous bailment.” In either case, a commercial bailment requires the bailee to use what is considered to be the degree of care that an ordinarily prudent person would use in handling his or her own property. For this very reason, bailee insurance is a sound solution whenever you’re entrusted with the care of items belonging to clients.