Georgia Property & Casualty Practice Exam

What type of insurance would be most appropriate for a service-oriented business that handles clients' property?

1. General liability insurance

2. Professional liability insurance

3. Commercial property insurance

4. Bailee insurance

The correct answer is: Bailee insurance

Bailee insurance is specifically designed to protect businesses that temporarily hold or take possession of clients' property. This type of coverage is crucial for service-oriented businesses, such as dry cleaners, repair shops, or storage facilities, where the business has a duty to safeguard clients' items while they are in their possession. The insurance covers losses or damages to the property of others that the business is entrusted with, addressing the liability that might arise if something were to happen to those items while they are being serviced or stored. This protection is distinct from general liability insurance, which covers bodily injury or property damage claims arising from a business's operations but does not specifically cover clients' property in the care of the business. Similarly, professional liability insurance is tailored for risks associated with professional services and advice rather than the physical handling of property. Commercial property insurance primarily protects the business's own physical assets rather than the property it holds for clients. Each of these coverages serves important functions, but bailee insurance is the most relevant for the scenario described.