Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Florida Law and EthicsHard
A Florida 2-20 General Lines Agent is advising a client who owns a dry cleaning business. The client is concerned about potential damage to customers' clothing while it is in their care, custody, or control for cleaning. Which type of coverage would the agent recommend to specifically cover this exposure?
- ACommercial Property Coverage Form
- BProducts-Completed Operations Liability
- CCommercial General Liability (CGL) Policy
- DBailee's Customer Policy
Show answer & explanationAnswer & explanation
Correct answer: D. Bailee's Customer Policy
A Bailee's Customer Policy is a type of Inland Marine insurance specifically designed to cover property belonging to others that is in the care, custody, or control of the insured (the 'bailee'), such as a dry cleaner, for a service. Standard CGL policies typically exclude property in the insured's care, custody, or control.
Why the other options are wrong
- A. Commercial Property covers the insured's own property at a fixed location, not customers' property in their care.
- B. Products-Completed Operations Liability covers bodily injury or property damage arising from the insured's products or completed work, not property that is currently in their care for service.
- C. CGL policies generally exclude property of others in the insured's care, custody, or control (the 'care, custody, or control' exclusion).
Bailee's Customer Policy
A Bailee's Customer Policy is an Inland Marine form that covers loss or damage to customers' property while it is in the care, custody, or control of the insured (the bailee).
- Covers property of others.
- For businesses that hold others' property for service (e.g., dry cleaners, repair shops).
- Overcomes the 'care, custody, or control' exclusion in CGL.
Memory trick: Bailee Protects Borrowed Belongings