June 18, 2018

Claims Corner: Warehouse Contracts


A warehouse operator stored a shipment of computer parts that were sent from New York to Virginia weighing 5,043 pounds with an invoice amount of $100,000. Prior to the shipment, the warehouse operator entered into a special contract increasing liability to $9.07 per pound instead of the standard bill of lading limitation of $.50 per pound. After the consignee picked up the goods from the warehouse in Virginia, parts of the shipment were missing. The buyer informed the warehouse operator the total weight missing was 2,143 pounds. Since the warehouse operator received approval for their special contract through Avalon, the policy paid a claim amount of $19,437 minus the deductible. If the warehouse operator did not pursue special contract approval prior to the shipment, the policy would have paid only the standard bill of lading limitation of $1,071.50 which would have fallen under the policy deductible.

  • Claim Amount: $60,000
  • Settlement: $40,000
  • Legal Fees: $3,000
  • Insured’s Deductible: $5,000

The claim above illustrates how valuable Avalon’s Combined Transit Liability (CTL) program is in managing your business risks. The base CTL program includes Errors & Omissions and Cargo Legal Liability. The policy can be tailored with multiple coverage options such as Special Contracts Coverage.

Avalon also offers a comprehensive Warehouse & Logistics insurance program that is specialized for your needs. Our representatives have years of experience in reviewing customer contracts, warehouse receipts and accessing warehouse risks. Click here for more information or an application.


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