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Warehouse owners are exposed to a myriad of risks, such as fire, flood, theft and damage of third-party owned materials stored in their facilities. Under the United States Uniform Commercial Code (UCC), a warehouse owner assumes responsibility for the materials they store for others for a fee. Therefore, when a facility experiences a loss, the warehouse owner can be found at fault for failing to exercise due care over their clients possessions. Regardless of the size of the warehouse, whether one room, or a large-scale facility, it is smart to protect its contents against potential liability with the proper warehouses insurance coverage. Insurance provides protection in the event that negligence on the part of the individuals storing materials or products results in damage to someone else's property. According to UCC Section 7-204(2), "Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouse owner shall not be liable." This means that any contract must detail the value of what is placed in a storage facility to determine damages in the event of a loss. Coverage options are available Most policies cover any legal liability as the warehouse owner with regard to a failure to exercise due care to prevent a loss. For example, the proprietor would be held liable if they forgot to set the facility's alarm and thieves stole materials stored by a third party. There may also be coverage exclusions A typical policy might also exclude many of the following: Accounts, bills and currency Mysterious or unexplained disappearance Delay, loss of market or loss of use Loss caused by forged warehouse receipts Nuclear device or other acts of war Governmental authority Change in temperature or increased humidity Infestation or deterioration of the property Contaminated goods, or Materials not covered by a warehouse receipt In addition to purchasing a warehouses insurance policy, it is wise to establish safeguards in the facility to protect against losses. This may include researching the crime rate in the area and inspecting neighboring businesses for hazards that may affect this facility; storing goods on solid shelving, storing electronic equipment in a climate-controlled area, and screening employees through proper background checks.
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