Three hundred bags of pepper disappeared from a warehouse. The warehouse was secured, had a working alarm system, and a night watchman on site. However, there was no forcible entry and nothing to indicate what happened to the pepper.

The warehouse reimbursed the customer based on their receipt. However, the warehouse legal liability coverage carrier refused to pay for the warehouse's loss because of the exclusion for mysterious disappearance.

Click here to see if the courts agreed.

Warehouse Legal Liability Coverage is an Inland Marine coverage that provides very broad coverage for property left in the care of the warehouse operator. The perils are very broad but there is a major condition. Coverage applies only when the customer can produce a warehouse receipt.

Click here to review the PF&M analysis of the AAIS Warehouse Legal Liability Coverage Form and pay close attention to the number of times the word "receipt" is mentioned.

Storage facilities are property-driven accounts that can develop substantial premiums. Limits of insurance may be significant and the coverage provided requires thoroughly understanding the types of property stored and loss prevention procedures that are in place.

Click here to review the Commercial Lines Producer Evaluation System General Merchandise Storage Facilities Questionnaire for questions you might want to ask about the building, business personal property, and bailees coverage.

The warehouse legal liability loss may have been an employee dishonesty loss in which case the loss would have been paid under the employer's dishonesty coverage rather than the warehouse legal liability coverage. The large amount of inventory entrusted to a warehouse operator can produce sizeable losses. This means that leading with a suggestion to modify the employee dishonesty coverage might be a good approach

Click here for wording you could use in a prospecting letter.