If you take another person’s property into your possession to provide services such as the cleaning or storing of these items, the purchase of a bailees insurance policy is highly recommended. You should understand that bailees coverage, based on property insurance, has broader coverage than a standard general liability policy. Bailees insurance is a common form of inland marine property insurance that is readily available in the property insurance market.
Simply put, if your in the business of taking possession of the property of your clients or customers and are being compensated to do so, you need to protect your company in the event of theft or damage occurrences. Your business is responsible for returning the property in the same condition as it was received and something unforeseen could prevent you from meeting your obligations. For example, when a customer, or bailor, takes a suit to the dry cleaner and that suit winds up damaged or stolen from the cleaners while in that person’s care, bailee’s coverage will then cover the loss.
What does bailees coverage cover?
A bailee’s policy should include protection from many different perils, including water and/or flood damage, burglary, wind damage, robbery, lightning, and collision that results in damages.
Jewelers, computer repair shops, tailors, warehouses, and owners of storage units are just a sample of the types of businesses that can benefit from this coverage. Naturally, these types of businesses must carry a variety of insurance coverages in order to be protected from exposures and risks associated with their line of work, but only a bailee’s policy will protect them from the types of costs stemming from damage to, or loss of, a customer’s property.
Other liability insurance policies may be designed to cover your business if any item in your care is damaged due to your own negligence or that of an employee’s, but other events, including fires, extreme weather conditions or in the case of a burglary, are incidents where general liability, property and even warehouse insurance policies would be exempt from providing coverage under the terms of these policies.