The intent of Legal Liability Coverage is to cover property of others in your care, custody or control (NOT including electronic data) for losses similar to those found under the Commercial Property policy. Legal Liability insurance is a type of Inland Marine coverage.
Some common types of Legal Liability policies include:
- Bailee’s Legal Liability – protection against any kind of non-owned property in your care, custody or control – commonly adapted for Laundromats, Appliance or Equipment Repair and any other businesses accepting customer’s property into their care, custody or control – all remaining examples are just variations of Bailee’s
- Warehouse Legal Liability – protection for owners of warehouses or self-storage facilities in their liability against damage to customers’ goods
- Marina Operators’ Legal Liability – protection for marinas’ liability for damage to customers’ vessels in Insured’s care, custody or control – usually included in specially written Marine General Liability policies
- Ship Repairer’s Legal Liability – protection for boat or ship yards’ liability for damage to customers’ vessels in Insured’s care, custody or control
- Garagekeepers Legal Liability – protection for auto shops’ liability for damage to customers’ vessels in Insured’s care, custody or control – further explored under Garage section – ISO publishes a Garage Coverage Form which includes Garagekeepers and is used for auto service shops or similar businesses.
The primary purpose of these policies is to cover your customers’ property while you have been entrusted with it. It is useful because you can select special limits to apply on “per item” and/or aggregate basis and it will apply while property is away from the premises, which is a restriction in traditional property policies (i.e. Building and Personal Property Coverage Form). Additionally, notice that Legal Liability covers “loss of use”, which is important since customers actual financial damages may include subsequent loss of use to damaged property.
There are also other types of coverage using the term “legal liability”, but are much different than Bailee type coverage. For example:
- Tenant Legal Liability – coverage for landlords if tenant negligence causes damage to buildings
- Educators Legal Liability – hybrid of D&O and E&O coverage for directors and trustees of a school board
- Pollution Legal Liability – very broad range of coverage possibility for buyers/sellers or property owners to protect against liability from pollution or pollution-related causes