The primary reason for an insured`s liability as a warehouse operator – and therefore the primary exposure factor under a WHLL policy – is the warehouse receipt, storage contract or service contract. This can confuse things for insurance professionals and insurance buyers, as a warehouse liability insurance policy addresses what an insured is responsible for and the contract determines what the insured is responsible for. Therefore, the terms of the storage contract may limit or extend the losses to which WWHLL`s policy responds. This is where things get complicated. In many cases, the property owner may ask the insured to sign a contract for their services. This Agreement sets out the limitations of liability and the amounts to be paid in the event of loss. However, contractual liability and legal liability are not the same thing. Legal liability is based on tort law, while contractual liability is based on the assumption of additional liabilities beyond those for which an insured person would normally be liable. A warehouse receipt is a document that contains the transactions of the parties involved and is essential for the operations of the warehouse. To be valid, a warehouse receipt must contain several important pieces of information, including, but not limited to, the location of the warehouse, the date the receipt was issued, a description of the goods to be stored, and the storage rate. Warehouse liability coverage does not apply if no warehouse receipt has been issued, as there is no way to determine what property to cover and its value. It is also worth remembering that under U.S. law, warehouse operators are not responsible for CAT events such as earthquakes and storms, as these events are beyond human control.
Rather, the responsibility of a warehouse operator depends on his actions and those of his organization. In the past, Warehouse Legal Liability (WHLL) was a complicated line with many gray areas and multiple interpretations of its covers. During the recent market weakness, the WHLL has moved away from its original intention. With the re-emergence of a healthier market environment, it can return to its roots: covering the legal liability of a person or organization that provides warehousing and transshipment services. In one sense, it is the non-transiting (or static) parent of legal liability for goods, but in another sense, it is a completely different animal. Legal warehouse liability can be a great cover to protect a warehouse operator. However, warehouse operations are often complex and should require legal advice and the expertise of an insurance professional to ensure that these operations are properly covered. In addition to purchasing legal liability insurance for your warehouse, it`s a good idea to make arrangements in your facility to avoid losses. This could include things like: investigating crime in your area and investigating nearby businesses for dangers that could impact your business, storing products on sturdy shelves, storing electronics in an air-conditioned environment, and testing employees thoroughly to stop hiring a potential thief. Before diving into coverage, loss assessment, and risk management, it`s helpful to understand the basics of warehouse liability insurance. This special type of insurance, also known as “warehouse operator liability insurance” or “warehouse operator liability insurance”, is designed to protect against loss or damage due to maintenance problems or gross negligence on the part of employees.
The path to a well-controlled inventory actually starts with the manufacturer or supplier. Just because your inventory will soon be out of sight doesn`t mean it has to be out of mind. Before your inventory reaches your 3PL provider`s warehouse door, you should have a plan to mitigate risk. Your plan should include at least these three steps: The primary cause of an insured`s liability as a warehouse operator – and therefore liability under a WHLL policy – is a warehouse invoice, storage contract, or service plan, as warehouse liability insurance meets what an insured person is responsible for. The agreement prescribes what the insured person is responsible for; This can confuse insurance specialists and buyers.