How Do I Insure My Customer's Property While It's In My Possession?
June 12, 2009
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Q. How Do I Insure My Customer's Property?
By: Brandon Sutkowi
Many businesses temporarily hold their customers' possessions to perform maintenance services or repairs.
These types of businesses most commonly include dry cleaners, jewelers and other repair shops such as those who work on shoes, small engines (such as lawnmowers, weed-whackers or snow-blowers), TVs and stereos, among others
A. Items that a customer leaves with your business create a "bailment" - a transfer of possession without a transfer of title. As the bailee (you: the business taking possession of your customer's property), you have a duty to protect your customer's property by exercising reasonable care.
There are two types of Bailee policies to protect your customers' belongings from damage or destruction by fire and other perils:
Less Desirable: Your customer can only collect if your business is negligent (or legally liable for the loss). Although this policy may save your business from paying for situations beyond your control (caused by a flood, for example), this situation can also lead to a potential public relations issue in which customers are dissatisfied regardless of who was at fault.
Remember one of the first rules in business: the customer is always right!
Your customer is reimbursed no matter who was at fault for the loss. Although this second type of coverage cost a bit more, the good will it guarantees is often worth the cost.
As always, be sure to inquire with your independent insurance agent to assure you are purchasing the appropriate type of insurance for your business exposures.
The brevity of this article prevents comprehensive consideration of all issues. The information contained herein should not be considered as insurance advice; such is expressly disclaimed. For specific matters, consult with your insurance agent.)
Brandon Sutkowi, Personal Lines Manager
Meadowbrook Insurance Agency
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