Yes, if you pack out, move, clean, or store a customer's belongings, because your general liability policy will not pay if those items are damaged, lost, or stolen while you hold them. The coverage that pays is for property in your care, often sold as bailee coverage or a customers goods add-on. Who this is for: water, fire, and mold restoration companies that do pack-outs and contents work.
The short version
- The word for holding someone else's property is a bailee, which just means you are the temporary keeper of goods you do not own.
- Your general liability policy has a care, custody, or control exclusion, so damage to property you are holding is not covered there.
- Bailee coverage pays when a customer's packed-out belongings are damaged, lost, or stolen while in your truck, your shop, or your storage.
- Size the limit to the most you would ever hold at one time, across every job, not the value of a single load.
- Illustrative cost is about $500 to $2,500 a year for $50,000 to $250,000 of limit, depending on where and how you store items.
Why won't my general liability policy pay for damaged customer belongings?
Because every general liability policy has a care, custody, or control exclusion. In plain English, it removes payment for damage to property you are holding, transporting, or working on. That describes a pack-out exactly. General liability is built to pay a stranger you injure, not to pay for the sofa you moved to your warehouse.
| Where the belongings are | Does general liability pay? | Does bailee coverage pay? |
|---|---|---|
| In the customer's home while you work | Usually no, care and custody exclusion | Yes |
| In your truck being moved to your shop | No | Yes, if in-transit is included |
| In your warehouse being cleaned or stored | No | Yes |
| Stolen from your locked storage overnight | No | Yes |
What exactly is bailee coverage?
Bailee coverage, sometimes called bailees customers coverage or a customers goods floater, is a policy that pays for damage to property that belongs to your customers while it is in your care. It is a type of inland marine policy, which is the family of policies that covers property that moves or sits away from your own building. See the inland marine overview for the wider family.
It usually pays for:
- Fire, water, and smoke damage to stored belongings at your shop.
- Theft from your storage or your truck.
- Damage in transit, if your policy includes items being moved.
- Damage while you clean or restore the item, which contents work creates.
It is different from your commercial property policy. Your property policy covers your building and your gear. Bailee coverage covers other people's things while you hold them.
How much bailee coverage do I need?
Size the limit to the most value you could ever be holding at one moment, across every open job, not the value of one house. If you run five pack-outs at once and each averages $40,000 of contents, you could be holding $200,000, so a $50,000 limit leaves you exposed by $150,000. Count your busiest week, not your average one.
| How you operate | Illustrative limit to discuss |
|---|---|
| Occasional small pack-outs, little storage | $50,000 |
| Regular pack-outs, one storage area | $100,000 to $150,000 |
| Heavy contents work, warehouse storage | $250,000 or more |
Watch for lower caps inside the limit for high-value items like jewelry, art, and electronics. A cap below the main limit is called a sublimit, and it is where contents claims most often fall short. Tell your broker if you ever store those items so the wording fits.
What does bailee coverage cost?
These numbers are illustrative. Your storage setup, security, and claims history set the real price.
| Limit | Illustrative annual cost |
|---|---|
| $50,000 | $500 to $900 |
| $100,000 to $150,000 | $900 to $1,800 |
| $250,000 | $1,500 to $2,500 |
Bailee coverage is one piece of the full picture. See what a water restoration company needs and what a fire restoration company needs for the rest.
How do I document belongings so a claim gets paid?
The claim is only as good as your records. Photograph every room before you pack out. List items on an inventory the customer signs. Number the boxes and log where each one goes. When a claim comes, that inventory is what proves what you held and what it was worth, and it is the single biggest reason a contents claim pays in full instead of turning into a dispute.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A restoration company in New Jersey with eight techs runs three pack-outs at once during a busy storm week. Each home's contents are worth roughly $60,000, so they are holding about $180,000 of customer belongings at their warehouse. They carry a $50,000 bailee limit they set years ago.
What went wrong: A sprinkler head fails at the warehouse overnight and soaks furniture and boxes from all three jobs. The total damage to customer belongings comes to about $140,000.
What it cost: The bailee policy pays its $50,000 limit and stops. The general liability insurer denies the rest under the care, custody, or control exclusion. The owner pays the remaining $90,000, plus the goodwill cost of three unhappy customers.
The fix: Bailee limits should track your busiest week, not the value of one job. A limit set when you did one pack-out at a time will not survive a storm season when you run several at once.
Frequently asked questions
Q: Does my restoration company need bailee coverage for customers' belongings?
Yes, if you pack out, move, clean, or store customer belongings. Your general liability policy will not pay for damage to property in your care, so bailee coverage is the policy that fills that gap.
Q: What does bailee mean?
A bailee is the temporary keeper of property that belongs to someone else. When you pack out a customer's furniture and store it, you are their bailee, and you can be held responsible if it is damaged or lost while you hold it.
Q: Isn't damage to a customer's property covered by my general liability policy?
No. General liability has a care, custody, or control exclusion that removes damage to property you are holding, moving, or working on. That is exactly what a pack-out is, which is why a separate policy is needed.
Q: How much bailee coverage should I carry?
Enough to cover the most value you could be holding at one time across every open job, not the value of a single home. Add up your busiest week, since that is when a warehouse loss would hurt most.
Q: Does bailee coverage pay if belongings are stolen or damaged in transit?
It can, but check the wording. Some policies cover items only at your premises, while others include theft and damage while goods are in your truck. Ask for in-transit to be included if you move belongings yourself.
Q: Is bailee coverage the same as my commercial property policy?
No. Your commercial property policy covers your building and your own equipment. Bailee coverage covers other people's property while it is in your care, which your property policy does not.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Sizing and pricing bailee coverage for customer belongings, alongside the rest of a restoration firm's policies, is a routine part of what we do.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.