When Does a Regular Company Become a Bailee?

bailee insurance

During regular business, companies often take possession of a customer’s personal property. When they do, they may assume legal responsibilities that could expose them to significant liability. For business owners, knowing whether an organization is a bailee, which obligations may be waived and when to purchase bailee insurance is important.


If workers at a company take possession of a customer’s personal property, they likely create a bailment. This may happen in a variety of business enterprises, such as the following:

  • Auto mechanics
  • Parking garages
  • Jewelry repair shops
  • Tailors
  • Storage units
  • Couriers
  • Valets
  • Warehouses
  • Dry cleaners
  • Responsibilities

If a company creates an implied or express bailment with its customers, it must return property in the same condition it received it. This can be difficult, of course, as frequently the company is trying to improve the customer’s property using different techniques and procedures. Nonetheless, if the property is damaged or destroyed, the company may be held legally responsible for actual and compensatory damages.

Company owners who wish to protect their businesses while meeting customer demands often purchase bailee insurance. By working with a skilled agent who understands the unique liabilities bailees face, savvy business owners often increase their odds of running a successful company.