As the bailee, your professional position is that of someone who takes possession of property belonging to another for the purposes of repairing or restoring the item in question for an agreed upon amount of money. Under the agreement, you’re to return the exact same (or identical property) to the bailor after having performed the work as specified, or if unable to make the necessary repairs, inform the bailor that the job could not be done to specifications.
There is a certain degree of care required in a commercial bailment agreement. The bailee must use a degree of care that any prudent individual would be expected to use in handling his or her own property. Bailee liability insurance coverage will provide coverage if, due to some unforeseen circumstance, the item delivered or picked up for service has become lost or damaged requiring the bailee to make reparations. For example, if your customer has some machine parts in need of retooling and your place of business is burglarized and the parts taken, you would be deemed responsible for the loss of said goods.
Bailee insurance is important coverage to have
The coverage provided by bailee insurance includes property that is on, or in transit to and from, the bailee’s premises. The insurance is in effect when the bailee issues a receipt to the bailor for the item. Coverage excludes property belonging to the insured bailee and loss due to vermin and insects.
Liability of bailees
Types of businesses having bailment exposures include jewelers, parking valet service providers, and electronic and other repair businesses to name a few. This is the insurance solution for someone that temporarily stores property belonging to customers in their warehouse, for any number of reasons. The bailment is to the mutual benefit of both parties, and is therefore considered a commercial bailment agreement.
Due to the expected standard of care, the bailee’s liability is generally limited to any loss or damages as a result of the bailee’s negligence. If, for whatever reason, the bailor’s property ends up being destroyed due to a fire or some type of natural causes, the bailee would not be liable for damage unless the fire was the result of the bailee’s negligence. In any event, where there is the possibility of an issue of any type, bailee liability insurance is the product you should purchase.