July 1, 2010

 Summary: A bailee for hire receives personal property of others ("bailors") and the bailee is then compensated for caring for it.  As both parties hope to benefit from this arrangement, the bailment might also be aptly termed a "bailment for mutual benefit." No matter what the bailment is called, it is well established that the owner or operator of a garage can be held legally liable (regardless of signs to the contrary posted throughout the premises) for loss or damage caused by failure to exercise the care required of a bailee. Once the bailee relationship is established, the bailee must exercise ordinary or due care to safeguard the property and may be called upon later to prove that this care was afforded. Because garage liability insurance excludes coverage for damage to property of others in the care of the insured, including garage customers' property, a need for separate coverage of this significant exposure is readily apparent. The need can be satisfied by purchasing garagekeepers coverage (section III of the garage coverage form).

Topics covered: