How to Obtain Bailees Insurance?
- Buy a separate bailees insurance policy or add bailees coverage to the existing property insurance policy on the firm. This is the best choice if you actually have anywhere near the amount of property in your warehouse as the amount of bailees insurance required in a contract.
- Buy a custom-crafted bailment coverage endorsement on the GL policy. This is the most economical choice if the mandatory bailees insurance limit far exceeds your actual loss exposure to property held in bailment.
- A bailees insurance policy that does not cover any property that you work on: What? If you are cleaning contents that’s why you need the bailees coverage in the first place. Two of the six reviewed policies had this restriction.
- A bailees insurance policy that excludes losses from flood: You will still be responsible to return the property to its pre-flood damage condition whether you have insurance or not.
- Insuring the property of others in your care, custody or control as an extension to a property insurance policy: These extensions typically exclude property that you work on and only insure replacement equipment you might rent. This is not the same as bailees insurance and does not meet a requirement for bailees coverage in a contract.
- A bailment coverage extension to the GL policy that only provides liability-based insurance coverage: That is not real bailees insurance either. Do not depend on a simple liability-based coverage extension to a GL policy to pay a bailment loss - you may be in for an unpleasant surprise if you do. These coverage extensions are OK if they obligate the GL policy to pay for a direct physical loss to the property, which mirrors a traditional bailees insurance policy.