Warehousing Goods and Potential Issues that May Arise

Warehouseman’s legal liability

Warehouseman’s legal liability coverage is a unique type of liability insurance policy. Having a good working relationship between the warehouse operator and the customer is dependent upon this coverage. If for whatever reason, a warehouse operator fails to exercise reasonable care in the handling and storage of goods, which then results in loss of, or damage to those goods, then the client will be duly compensated.

Legal liability insurance for warehouse operators is coverage made available for practically any warehouse storage operations. It helps to cover a business as a “bailee” or someone entrusted with the property of another, for direct physical loss or damage of property that happens during storage, cross-docking, packaging, labeling or other services provided by the bailee.

Warehouseman’s legal liability

Definition of the term “third-party coverage”

Warehouse legal liability policy is third-party coverage meaning that, when negligence does occur, the insurance carrier directly pays the customer for the loss incurred. Under these circumstances, the customer would not (nor would they want to be), named as an additional insured under the warehouse operator’s warehouseman’s legal liability policy.

It’s important to note that, in most cases, a warehouse legal liability policy excludes liability for loss or damage where the warehouse operator has taken on more responsibility for the customer’s goods beyond what is considered legally required. This type of situation can result in the insurance carrier insuring for issues beyond any reasonable control or care, which is how they go about setting their insurance premiums in the first place.

Anytime that a warehousing services agreement contains any provision that requires the warehouse operator to assume liability for a customer’s goods beyond the standard of “reasonable care”, then such a provision may wind up voiding the warehouse operator’s legal liability coverage. This could end up placing both parties in an unfavorable position, with litigation being a potential outcome.

Warehouseman will do their utmost to avoid situations where an event may lead to a significant loss or damage to the customer’s goods. This translates into the operator’s failure to take reasonable care of the customer’s goods when something does goes wrong, and they must file a claim with the warehouseman’s legal liability insurer to respond to the issue.