A bailment situation is created when one party accepts an agreement to store or take custody of goods belonging to another party. In this situation, the people who have the goods are often liable for any loss that occurs, without limits. A simple example is the luggage you might leave in a hotel when you’re on vacation. They usually have to attempt to limit their liability for theft and damage by posting signs claiming that the hotel is not responsible for the loss of any personal property in the rooms or elsewhere on the property.
You may be wondering where logistics businesses and bailee liability insurance brokers fit into all of this. If you operate a supply chain business, such as in the shipping or warehousing sectors, and accept goods without a written agreement limiting your liability, you become a bailee liable for full value of any damaged goods in the case of damage. You may also have to pay for the removal of any damaged cargo along with any costs associated with defending yourself against claims that the items were damaged while under your care.
Bailee liability insurance brokers analyze your business practices and coverage policies to help mitigate these risks. Covering against damage caused to valuable cargo gives your clients peace of mind, and it protects you against costs that could potentially put you out of business permanently.