Bailee Coverage
Insurance that covers loss or damage to property belonging to others while it is temporarily in the care, custody, or control of the insured, such as a contractor holding a client's equipment.
Overview
Bailee Coverage protects businesses that temporarily hold property belonging to others. Standard CGL policies exclude damage to property in the insured's care, custody, or control — creating a gap that bailee coverage fills.
When It Matters
Property managers and general contractors frequently encounter bailee exposure. Examples include contractors who store client equipment overnight, warehouses holding goods for third parties, and repair shops with customer vehicles. If the property is damaged by fire, theft, or negligence while in the bailee's possession, this coverage responds.
Verification on a COI
Bailee coverage typically appears as an endorsement to an Inland Marine or Commercial Property policy. Look for it referenced in the Description of Operations section or as a separate policy line. Verify that the coverage limit is adequate for the maximum value of property the vendor will hold at any time.
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