DEFINITION of 'Bailee's Customers Insurance'

Insurance coverage for legal liability resulting from damage or destruction of a bailor's property while temporarily under the care or custody of a bailee. A bailee is a person or organization that has temporary possession of someone else's personal property (dry cleaner, parking valet, jewelers, repairers, etc.)

The coverage includes property that is on, or in transit to and from, the bailee's premises. Events and perils covered include fire, lightning, theft, burglary, robbery, explosion, collision, flood, earthquake and damage or destruction in the course of transportation by a carrier. The insurance is in effect when the bailee issues a receipt to the bailor for the item. Coverage excludes property belonging to the insured bailee and loss due to vermin and insects.

BREAKING DOWN 'Bailee's Customers Insurance'

When a customer (bailor) takes a suit to the dry cleaner to be cleaned, the suit is temporarily under the control of the bailee (dry cleaner). The bailor expects the suit to be returned in good condition. If the suit is stolen from the cleaner or is damaged while under the care of the cleaner, the insurance would cover the loss.



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