What’s the difference between Bailee Coverage and Cargo Coverage?

You probably have a good assumption of what insurance coverage for Cargo is –

But what about Bailee coverage? In this case, Bailee is not a trending baby name for girls, and it has nothing to do with jail. Bailee coverage in the insurance world means you have some protection from liabilities when you have possession of a company or person’s items for transport, storage, or maintenance. Sound similar to “cargo” to you? Well, there are some key differences, so let’s review them.

What exactly is Bailee Cargo Insurance – and what is a Bailee?

While both of these coverages are considered “Inland Marine” coverages (materials in transit), Bailee Coverage is more applicable for businesses or people that regularly take items into their “temporary possession” for a client. Think of a dry cleaner, jeweler, or repair person as examples. They are being entrusted with this property, and it is often stored on their property while the service is being completed. 

Since this customer property is being held “in bailment”, the business or person it is entrusted to is considered a “bailee” – hence the coverage name. There are different policies for Bailee’s, but they may cover you for damage, destruction, or loss of the property by fire, flood, theft, explosion, lightning, or traffic accidents. 

Do I need to add Bailee Insurance or Cargo Coverage to my Trucking Insurance policy?

Cargo coverage is more applicable for companies or people transporting goods from one location to another, with more temporary possession of the items. It can help cover the cost of cargo that’s lost or damaged on its way to its destination due to accidents, fire, or theft. It can also cover the cost of preventing further loss to damaged cargo, legal expenses, cleanup to remove debris or potential pollutants from a spill, and even freight charges lost when a load doesn’t make it to its destination. 

Trucking companies and/or drivers are more likely to need cargo insurance – although it is not required by the Federal government. And while there’s no Federal requirement, it is frequently required by freight brokers and companies shipping goods, so it can be value-add to a trucker’s insurance policy.

Cargo insurance also has many variations, different limits, and a range of exclusions. If you ship goods, or take possession of goods, let us discuss the policy options with you and help determine the right coverage for your needs. Visit our Trucking Insurance page or contact our trucking specialists for more information.