Warehouse liability insurance can seem complex, but at the heart of it is protecting cargo as it is transported, processed and warehoused. As the cargo passes from one transporter to another, bailment attaches. Bailment is a legal relationship where a person or entity is in possession, and therefore legal responsibility for, another person or entity’s property. When a company or individual is responsible for another’s property, liability attaches.
Unforeseen Events Happen
One of the biggest reasons to have warehouse liability coverage is that the unforeseen happens. Even though warehouse operators can do everything in their power to keep the goods and cargo safe, there are still events that are completely outside of their control. Whether it is fires, theft or damage, if the cargo is in a warehouse operator’s possession, they are liable for what happens to that property.
Different Exposures Create Unique Insurance Needs
It may be tempting to think that acting in good faith and providing reasonable care are enough to stave off legal claims. Unfortunately, the possibility of legal action against a warehouse operator still exists. When warehouse operators create a bailment situation, the US Uniform Commercial Code (UCC) holds that the bailor assumes legal liabilities. A comprehensive warehouse liability insurance plan can help your company regardless of what the exposures to risk your company faces.