Bailment

What Does Bailment Mean?

Bailment occurs when a bailor temporarily transfers possession of property to another party, the bailee, for a specific period. Bailees often purchase bailee’s customer insurance to protect the assets that are temporarily under their care. A standard bailee insurance policy covers items like jewelry left for repair, vehicles in for service, or clothing at a dry cleaner.

Insuranceopedia Explains Bailment

There are many potential risks to property while a bailee is responsible for it on behalf of a bailor. For example, if a bailor leaves a car in a parking garage, the bailee (the parking garage company) could incur a loss if the car is stolen or if an accident occurs within the garage. In such cases, bailee’s customer insurance can cover the losses sustained. Parking lot and garage operators typically buy valet parking insurance, which pays out when a customer’s vehicle is damaged or stolen on the property.