Understanding a Warehousing Agreement
Warehouse management is the hub of your supply chain. A warehouse service agreement outlines the insurance coverage provided by the warehouse operator. This type of agreement is a form of third party liability coverage that means if the warehouse operator is in any way negligent of the client’s goods, the insurance provider is responsible for paying the client directly for any damage or loss incurred.
A warehouse legal liability insurance policy will only pay a client under circumstances in which the warehouse operator is responsible for damage caused to stored goods. As a client you are still responsible for insuring your goods against other types of damages or loss, such as flooding, stormage and fire.
Most warehouse legal liability coverage excludes liability for damage or loss in circumstances where the warehouse operator has made an agreement to take on added responsibility that that which is legally required. The standard legal requirement is “reasonable care.” There are exclusions to this type of liability policy including:
- materials not included on the warehouse receipt
- mysterious disappearance
- loss of use or loss of market
- bills, accounts and currency
- loss due to forged warehouse receipts
- legal defense costs
- deterioration or infestation of the property
- contaminated goods
- debris removal
Remember, your contract with the warehouse operator must include details of the value of your goods in storage so that the insurance provider can determine the damages due in the event of loss.
At Bonded Services we are proud to be the regional leader in the transport and storage industries. We are committed to providing high quality services including secure public warehousing, contract warehousing, reliable order fulfilment, transportation, and inventory management. We have experience serving many industries from building products to food products, auto parts to lubricants. Call us today to discuss how we can fulfill your transport and storage needs.