Bailee's Customer Coverage
"Their Property In Your Hands — Fully Protected."
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.
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 ApproachAt 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.
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