A bailee is any person or business that assumes care, custody, or control of the personal property of another. In the case of a pet groomer, veterinarian, or boarding kennel, the animals left in your care are considered the personal property of others. To protect your business from injury or death to these animals, consider purchasing animal bailee coverage.
Covered Property Defined
For this article, we will examine the animal bailee coverage offer by Hartford Insurance Company, as part of the Spectrum BOP policy (form SS0401 03/12). This bailee form begins by stating exactly what animals are considered covered property:
We will pay for direct physical loss of or physical damage to animals owned by others while in your care, custody, or control at the “scheduled premises” as shown in the Declarations, or while away from the “scheduled premises” anywhere within the coverage territory, including while in transit in your vehicle.
Note the bold verbiage owned by others. A key element of bailee coverage is the property must not be your own, but only in your temporary custody. In fact, the bailee coverage form further clarifies in the property not covered section:
Covered Property does not include:
a. Animals held for sale;
b. Animals held as samples or for delivery after sale;
The intent of the bailee form is to cover only those animals held in your temporary custody. Animals held for sale, such as pet store inventory, are considered business property and coverage is provided elsewhere in the policy.
Covered Cause of Loss
The Hartford bailee form provides “open peril” coverage for animals held in bailment, much like a special form cause of loss property insurance policy. This open peril coverage means any type of physical damage, injury, or death is covered unless the bailee form specifically excludes it.
Animal Bailee Coverage Exclusions
Since the animal bailee form provides open peril coverage, a study of the exclusions is critical. Section II of the Hartford bailee form details what circumstances and situations will not be afforded coverage. Some of the exclusions are common to a property form such as governmental action, war, and nuclear hazard. Others are very specific to the animal bailee form (verbiage truncated):
We will not pay for loss or damage caused by or resulting from any of the following:
1. Theft of animals left in vehicles overnight.
2. Dishonest acts by you, your employees or authorized representatives.
3. Neglect by you to use all reasonable means to save and preserve the animals.
4. Sickness, disease or natural causes.
5. Injury or death caused by any act or omission in the furnishing or your services by you or your empoloyees.
6. Testing, or any kind of experimentation or research, whether conduction or directed by you, your employees or others.
Some of these specific exclusions are not insurable by the bailee, such as numbers 1, 3, 4, and 6. Exclusion number 2 can be addressed with employee dishonesty coverage. Exclusion number 5 refers specifically to the professional service provided by the bailee, such as grooming or veterinary services. That coverage can be provided by professional liability insurance, which is available under the Hartford Spectrum policy (pet groomers professional; veterinarians professional).
Why You Need Animal Bailee Coverage
If you are in the business if treating, boarding, or caring for animals that belong to others, you should include animal bailee coverage in your business insurance plan. Without this coverage, any injury, damage, or death to animals in your care, custody, or control is likely excluded.
Contact Safeguard Insurance today for a review of your current business insurance policy, or a new quote. Let us make sure your animal services business has the right coverage, at the right price.