<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=393225&amp;fmt=gif">
Port_of_LA_Pier 300_400 Container Terminals

West Coast and California Logistics Blog

Understanding Warehouse Insurance and Liability

Fri, Nov 18, 2016 @ 03:18 PM / by Bob Lilja

Your products are the life blood of your business. Their secure movement through the supply chain, from manufacturing point to final delivery to your customer, is critical to your success.

If your goods are lost or damaged while in transit, or in the custody and care of a third party warehouse provider, you could be facing loss of revenue of tens or hundreds of thousands of dollars without the ability to fully recoup those losses.

warehouse insuranceThat’s why asking the right questions, assuring that you have the right coverage, and choosing the right transportation and distribution partners are such critical decisions. At Weber, our clients often ask us questions about what kinds of insurance we carry, what coverage we provide, and that insurance decisions they should make when using our transportation and warehouse solutions.

In this post, we’ll talk about Warehousemen Legal Liability Insurance. This type of insurance, which is carried by every responsible third party warehousing company, means that the provider is responsible for the safe storage of your goods and must provide “reasonable care” to your goods while in their care.

This means that if the provider does not provide “reasonable care” and their negligence results in loss or damage of your goods, the warehouse provider’s insurance company covers losses and pays you for the goods, subject to the limitations provided for in your warehouse contractual agreement.

It’s important to note that with warehouse legal liability insurance, the insurance provider that is covering the policy will only pay your damages if negligence is the cause of the loss or damage.

Under this kind of insurance policy, you are still fully responsible for your goods for any other kind of damage or loss of goods i.e. fires, floods, storms, earthquakes, etc.

It is especially important to recognize that warehouse providers do not normally intend to fully insure your goods.  They are instead taking responsibility for negligence.  Almost all warehouse contracts substantially limit liability, and if your product is especially valuable, that liability level may be far below the actual cost of your goods, and not cover your loss, even if the warehouse is 100% negligent. 

Also note that if your warehouse provider is offering added storage benefits or a higher degree of care than what their insurance policy defines as “reasonable”, you need to make sure that your contract specifies who will cover damages in the event the insurance provider declines to cover the costs – and that the provider, if directly providing that coverage, is fundamentally financially strong enough to do so in the event of a catastrophic loss.

At Weber Logistics, we take extreme care to assure that our clients understand exactly what benefits and limitations we offer with regard to our responsibility for the care and custody of their valuable goods. Good partners recognize that risk management is a role that both parties share in a business relationship.

commerical warehouse pricing guide

Topics: Logistics Management, Insurance, Liability, Warehouse

Written by Bob Lilja

Subscribe to Instant Updates

Recent Posts

Posts by Topic

see all