A Policy for the Transportation of Goods

In the transportation industry, goods in transit are often exposed to a number of risks. When merchandise and/or cargo is being moved or stored and becomes subject to a loss or damaged during transportation or storage having bailees insurance coverage addresses these concerns. The policy provides compensation and is awarded to clients affected by any loss of their cargo while in the care of others.

Bailee’s coverage is known as a specialized type of inland marine coverage, one that protects against liabilities resulting from damage or destruction of a client’s property while in your care. As the “bailee,” you must make good on any promise to fulfill your role as caretaker for the property given to you for storage, repair, or servicing.

Certain risks are the nature of the business

When taking temporary possession of property belonging to others there are exposures that must be considered. Under ordinary circumstances, everything should run smoothly, but if a fire were to break out, something completely out of your control, and this results in a complete loss, it’s only going to be a covered loss if you are properly insured. The coverage becomes effective as soon as you issue a receipt to the bailor for their property.

This insurance coverage includes any property that is on your premises, or in transit to or from a dedicated location. Numerous covered perils are typically included in bailees insurance coverage, including fire, explosion, flood, earthquake, lightning, burglary, theft, robbery, collision, or destruction or damage resulting from transportation. The only real issue commonly excluded is damage to property due to insect or rodent infestation.

As is always the case, your general liability (GL) policy will not cover you for any loss as a bailee. The GL policy will not cover incidents resulting in property damage or bodily injury for goods while in transit. The GL policy clearly defines loading and unloading as the handling of a property while it is being transported onto a vehicle, while stored in a vehicle, and while being moved from the vehicle to its final destination. Bailee coverage is necessary in order to fill these coverage gaps.

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