Warehouse Bond

What Does Warehouse Bond Mean?

A warehouse bond is a type of guarantee or surety bond that protects the warehouse operator or facility owner from financial losses resulting from claims filed by owners of goods that are damaged or lost while stored in the warehouse. It provides coverage up to the value of the goods in storage. Warehouse operators often pair this bond with bailee insurance, which covers physical loss of customer property in their care, since the bond and the policy address different sides of the same risk.

Insuranceopedia Explains Warehouse Bond

A warehouse bond typically lasts for one year and may be renewed annually. The annual premium paid to the surety (insurance) company issuing the bond is calculated as a percentage of the total value of the goods in storage. Some warehouse bonds also provide protection for property owners against lawsuits arising from injury claims. For example, if a warehouse employee or another individual is injured while inside the warehouse, the bond can cover the damages. Operators who want broader protection against third-party injury or property damage claims often carry general liability insurance alongside the bond.