Warehousing is the storage of goods for profit at a physical location, such as a storage facility, that is designed to receive goods and products that will eventually be distributed to consumers or other businesses. A warehouse is often referred to as a distribution center. Warehouse management is the process of documenting and coordinating any incoming goods, taking proper care to store and track these goods, until such time as they are distributed to their proper destinations.
During storage of the items, they could be subjected to all types of hazard. They could wind up lost, stolen, damaged or destroyed due to a wide range of concerns. They could even end up becoming contaminated which would greatly affect their value. The warehouseman’s responsibility for the care of such goods requires Warehouse legal liability insurance to provide compensation to the injured parties.
Warehouse owners can provide services to public, or private sectors
Not all warehousemen provide the same services. A public warehouseman provides services to anyone willing to pay the cost of storing their goods and must accept the warehouseman’s terms of storage. There are warehouses owned or operated by department stores, chain stores, manufacturers or distributors. These are private storage facilities, often located close to the main plant.
There are also branch, or field warehouses that belong to private facilities often located in areas of distribution to customers or branch locations. There are laws in every state that determine the measure of responsibility for stored goods, allow for inspection of items in the care of professionals, and regulate the issuance of warehouse receipts, often used as security for loans.
A bonded warehouse, on the other hand, is one in which imports are stored pending payment of an import duty by the owner prior to the release of the goods. The warehouseman and the U.S. Customs authorities jointly share control of goods in bonded storage. State laws mandate that warehousemen obtain bonds designed to protect those storing goods from any wrongful acts of warehousemen as well as to ensure payment of any judgments obtained against them.
Warehouse legal liability insurance helps cover the legal liability of the insured operating as a warehouseman (or bailee) with respect to physical loss or damage to property of customers. This may be based on whether the loss or damage was caused by his or her negligence, subject to designated limits.