BAILEE’S CUSTOMER COVERAGE

Protection for property belonging to others in your care, custody, or control

Bailee’s Coverage, often referred to as Bailee’s Customer Insurance, provides protection for property that belongs to others while it is in your care, custody, or control for storage, repair, service, or temporary possession. Standard General Liability and Property policies typically exclude damage to property that you are responsible for, which makes Bailee’s coverage essential for businesses that handle customer property as part of their operations.

This coverage helps protect your business from financial loss if a customer’s property is damaged, lost, or destroyed while entrusted to you.

What Bailee’s Coverage Covers
Bailee’s insurance typically responds to loss or damage involving customer property while it is in your possession, including:

Damage to Customer Property
Coverage for property belonging to others that is damaged while being repaired, serviced, stored, or handled by your business.

Fire, Theft, or Vandalism
Protection if customer property is destroyed or stolen while located at your premises or in your custody.

Accidental Damage
Coverage for unintentional damage caused during handling, cleaning, repair, or processing.

Property in Transit
Coverage may apply while customer property is being transported, depending on policy terms.

Mysterious Disappearance
Some policies provide coverage when property cannot be located and the cause of loss is unknown, if included.

Coverage applies only to property belonging to others, not to property owned by your business.

What It Does Not Cover
Bailee’s policies are specialized and commonly exclude:

• Damage to your own property

• Normal wear and tear

• Intentional acts or dishonesty

• Mechanical or electrical breakdown

• Property not declared or exceeding limits

• Employee theft unless endorsed

• Flood, earthquake, or other catastrophic events unless added

• Loss outside the coverage territory

Coverage depends on how property values, locations, and operations are reported to the insurer.

Who Needs Bailee’s Coverage?
Bailee’s insurance is commonly needed by businesses that handle customer property, including:

• Auto repair shops and body shops

• Dry cleaners and laundries

• Storage facilities and warehouses

• Contractors working on customer property

• Electronics repair shops

• Jewelers and watch repair businesses

• Equipment rental companies

• Manufacturers performing work on customer materials

In many cases, customers assume their property is covered, even when standard policies exclude it.

How Coverage Is Structured
Bailee’s coverage can be written in different forms depending on the operation, including:

• Legal liability form (covers losses you are legally liable for)

• Direct damage form (covers loss regardless of fault, if included)

• Scheduled limits for specific locations

• Blanket limits for multiple locations

• Per-item or per-occurrence limits

• Policies often require:

• Accurate reporting of maximum values

• Description of operations

• Security requirements

• Deductibles and sublimits

Incorrect limits are one of the most common causes of uncovered losses.

Real-World Claim Examples

• A vehicle is damaged while being repaired at a shop

• Customer clothing is destroyed in a fire at a dry cleaner

• Stored equipment is stolen from a warehouse

• A contractor accidentally damages a client’s property during service

• Customer electronics are lost while in the repair facility

Without Bailee’s coverage, these losses often must be paid out of pocket.

Why Proper Placement Matters
Bailee’s coverage varies significantly depending on:

• Type of property handled

• Maximum value in custody

• Storage vs repair vs transport exposure

• Legal liability vs direct damage forms

• Policy exclusions and sublimits

• Security and protective safeguards

Improperly structured policies can leave large customer losses uninsured, even when the business believed coverage existed.

Our Approach
At Cory Washington & Co., we structure Bailee’s coverage based on the actual value of property entrusted to your business and how that property is stored, transported, or worked on. We review contracts, customer agreements, and operational procedures to ensure coverage applies when responsibility shifts to you.

Our goal is to protect both your business and your customers by eliminating gaps that commonly exist in standard policies.

Disclaimer
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.