Property of Others Coverage is provided on a fixed dollar limit versus IWA’s Bailee Coverage, which is provided on an Unlimited or Actual Loss Sustained basis – subject only to certain sub-limits.
Why is this important?
Customer’s garments move in and out of the store frequently, therefore, the actual dollar value of the garments in a store at any given time is very difficult to predict. This makes it impossible to be sure a set limit (say $250,000) will be adequate in the event of a catastrophic loss.
In the event of a major loss, if your coverage is “Property of Others” and there is a fixed dollar amount as a limit, say $200,000, most standard insurance companies would require the garment owners (not the insured) to file individual claims for their property. Many standard carriers offer Set Limit Bailee coverage, not “unlimited” or Actual Loss Sustained (ALS). IWA’s Fabricare Advantage includes Actual Loss Sustained limits on the Bailee.
In the case of a “fixed limit”, the company would need to wait until all the claims were in from each of the dry cleaner’s customers or garment owners. The company then adds up all the claims. If that total is higher than the $200,000 fixed limit, the insurance company would adjust for each claim proportionately using the $200,000 available limit. This means that if the total of all the claims is $250,000, each garment owner would receive their “portion” of the $200,000 limit available for claim distribution. In this example that would be 80% of their actual claim amount.
Another problem with Property of Others limits, is insurance companies requiring ALL the claims be received before they begin to process the claims. This can take a long period of time, causing the garment owners to wait months in some cases for the final claims to come in & their claim to be processed, which puts the insured in a very uncomfortable position with their customers.
Business Owners can avoid much of this frustration by having IWA’s Fabricare Advantage’s™ Unlimited Bailee coverage. IWA’s Bailee coverage enhancement handles each claim separately. Individual claims are received, processed and paid based on the guidelines set forth. There is no concern as to the overall values in the store as the coverage contemplates the values changing.
About Irving Weber Associates
At Irving Weber Associates, Inc., we understand what it takes to run a successful Dry Cleaner, Coin Operated Laundromat, Linen Supply business, or Commercial Launderer, including investing in a comprehensive Insurance Program to ensure that you are financially protected against legal claims. Our program, Fabricare Advantage™, offers specialty coverages including General Liability, Property, Site Pollution Liability, Boiler & Machinery Equipment Breakdown, Workers’ Compensation, Business Auto, and many more. For a detailed look at how we can help you safeguard your business, please contact our experts today at (800) 243-1811.