Bailee insurance for customers' property
A bailee is anyone holding someone else's property: a repair shop, a dry cleaner, an upholsterer, a storage operator. General liability excludes property in your care, custody or control, so a fire in your shop can leave every customer's property uninsured.
Bailees customers or bailee legal liability
A bailees customers form pays for customers' property damaged in your care whether or not you were at fault. A bailee legal liability form pays only when you are legally responsible. Customers usually prefer the first, because a fire caused by lightning would leave them with nothing under a legal liability form.
Request a quote
There is no separate application for this class, so start with the short inland marine quote request. Someone will follow up with any underwriting questions specific to your risk. Insurance agents can also request an appointment.
Who needs it
- Equipment, engine and small-engine repair shops
- Electronics, appliance and instrument repair
- Dry cleaners, laundries and rug cleaners
- Upholsterers, furniture refinishers and framers
- Processors and finishers holding customers' goods
What the application asks
- Type of property held and its highest value at any one time
- Average length of time property stays in your care
- Whether property is picked up and delivered, and by whom
- Fire protection, alarms and storage security
- Claim tickets and limits of liability printed on them
Gaps to ask about
Damage from your own work
Many bailee forms exclude damage caused by the repair, cleaning or processing itself, such as a fabric shrunk in cleaning or a part ruined during repair. Ask whether a processing or workmanship exclusion applies and whether it can be bought back.
Mysterious disappearance
An item that simply cannot be found, with no sign of theft, is often excluded or limited. A clear claim-ticket system and inventory records help both with claims and with underwriting.
Property away from your shop
Coverage may apply only at your listed location. If you pick up and deliver, or send work to an outside vendor, ask whether property in transit and at other locations is included.
What to do when a customer's property is damaged
- Protect the item from further damage and move it somewhere secure.
- Photograph the damage and the area around it, and note the date and time.
- Pull the claim ticket, work order and any notes on the item's condition when it came in.
- Tell the customer what happened, but do not promise payment before the claim is reported.
- Report the loss to your agent with the customer's contact details and an estimate of the item's value.
- Keep the damaged item until the adjuster has inspected it or tells you it can be released.
Bailees insurance: the two main forms
Bailees insurance is written two ways, and the difference matters after a loss.
A bailees customers form pays for customers' property that is damaged or destroyed while in your care, whether or not you were at fault. A bailee legal liability form pays only when you are legally liable for the damage. Customer relationships often depend on paying for losses quickly, so many shops choose the bailees customers form. Ask which form a quote is written on.
Common questions
What is bailees insurance?
Bailees insurance covers property that belongs to your customers while it is in your care for repair, cleaning, storage, processing or sale. It fills the gap left by general liability, which excludes property in your care, custody or control.
Is bailee insurance the same as warehouse legal liability?
They are related. Warehouse legal liability is a bailee form written for warehouse operators storing goods under a warehouse receipt. Bailee coverage is the broader class for any business holding customers' property.
Does garagekeepers coverage work the same way?
Garagekeepers is the auto-specific version, covering customers' vehicles at a repair shop, body shop or parking operation. It is written with a garage or auto policy.
Does the limit printed on my claim ticket protect me?
It may help under a legal liability form, depending on state law and how clearly the limit was disclosed. Under a bailees customers form, the policy pays for the customer's property up to its own terms, so set the policy limit at your highest value on hand.
Does bailee coverage protect property I'm delivering back to a customer?
Some forms include transit on your own vehicles and some do not. If you pick up and deliver, ask for transit coverage to be confirmed on the policy.
Related coverage
Transportation Insurance
Covers your goods while a carrier moves them: trip transit, annual transit and shippers interest.
Coverage & quoteMotor Truck Cargo
Covers the freight on your truck: carriers legal liability, owners cargo and contingent cargo.
Coverage & applicationRiggers Liability
Covers other people's property while you lift, hoist, rig or move it.
Coverage & quoteEDP & Computers
Servers, laptops, point-of-sale and data processing equipment, plus data restoration.
Coverage & quote