Bailee liability is a necessity for any company that takes the responsibility of entering into a bailment relationship. Although the coverage required is dependent on the type of business you have, there are certain circumstances where you can be expressly held liable and others where there is no culpability whatsoever.
Private carriers have the most control over what types of bailee liability they are responsible for. Because private carriers generally do not act as full-time bailees, or holders of goods, they have more discretion at who they are liable to and how much they are liable for. They also have a right to refusal.
There are also common carriers whose primary responsibility is as bailee, and as such they have less control over what they can turn down. Their liability is higher because once a good is in their possession, the bailor, the owner of the property, has little to no ability to monitor the condition of the property in question.
In either case, bailees are not held responsible for acts of God, such as natural disasters. The extent of bailee responsibility should be clearly outlined in their liability contracts. If you are interested in knowing just how much bailee liability your company should carry, you should contact a company that specializes in your particular insurance needs.
Businesses that undertake the responsibility for cleaning, transporting, storing, or repairing their clients items also undertake the inherent risk that something may happen to those items before they are returned. That’s where bailees coverage comes in.
When You’re in Hot Water
Preventative measures and best practices have greatly improved over the years, and incidents tend to be few or minor. However, accidents do occur, and the best way to be prepared is to be fully insured. You should ask your broker for a comprehensive list of all scenarios, but damage from the following may be covered:
- Extreme weather, such as lightning, wind, or hail
- Accidents on or within the premises, including fire, explosions, or collisions
- Natural disasters, such as floods or earthquakes
- Intentional malice, including vandalism or theft
- Transportation incidents
Bailees coverage generally protects property during transit to or from company premises, as well as when property is on site.
In some cases, there may be liability beyond restoring a possession to its owner. If there are any resulting legal claims due to loss, you could be liable for certain fees. Its also possible that if there is extensive property damage, you may be responsible for any cleanup and removal costs. Talk to your broker about the best options for protecting yourself, your company, and your clients.