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My client runs a small self-storage facility, mainly made up of shipping containers. The terms and conditions of storage that he requires all clients to sign state:

"The service provided to you, the storer, by the owner is the right to use a space provided by the owner for the sole purpose of storing goods. No other goods or services are provided by the owner."

"Goods are stored at your sole risk. The owner is not liable for the loss or damage to any goods stored on its premises."

My client is not involved in the process of moving goods in or out of the facility. Storers provide their own padlock and are able to come and go as they please to remove or add things to the containers.

In a recent renewal discussion I explained that property in care, custody and control was excluded under his public liability policy which led to a discussion around bailees cover. 

After speaking with a colleague he suggested that bailees was not required as all my client is doing is providing space to store items, rather than managing the facility. They see this more as a property owner/landlord type risk as my client has clearly stated in the terms and conditions that goods are stored at their own risk.

I am not sure that this would stand up if my client was sued for damage to storers property, say from a leak in a container which caused damage to the goods stored.

Any advice on this would be much appreciated.

Crossley Gates replies

At law, a person is a bailee if he or she has possession of goods belonging to someone else. The key is possession.

Here your client has possession on his or her land goods belonging to someone else - your client is a bailee of the goods. The obligations of a bailee at common-law apply to your client.

In the light of this, I suggest it would be wise to arrange bailee's liability cover. For some reason that I have never understood, the insurance industry refuses to call the nature of the liability covered by its correct legal name. Instead it refers to it as cover for property in the insured's care, custody or control.

A bailee can limit or exclude his or her legal liability as bailee in the contract of bailment. I suggest your client takes legal advice about whether its terms are worded sufficiently widely to achieve this.

March 2021

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