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Property Damaged in Someone Else's Care

When the insured hands property to a business, like a mover, storage facility, repair shop, dry cleaner, or valet, and it comes back damaged or doesn't come back at all, the law often helps you. In many states, once you show the property was handed over in good shape and returned damaged, the business has to explain what happened. Watch the contract, though, because these businesses usually limit what they owe.

What it coversMovers, storage, repair shops, valets, the burden on the business, contract limits

Step-by-step checklist

Identify

Contact the claim adjuster right away. Ask them to hold the scene and for permission to retain an expert at the client's expense. Note the call in the file.
On every claim, ask the client whether they want an origin and cause investigator to review the scene, or confirm one is already assigned. Note their answer in the file so the decision is on record.
Make sure no evidence is touched or moved until the expert has secured the scene
Get the client's approval for the scene exam cost. Most run at least $1,600 with travel, the day rate, and expenses.
Confirm the business had the property and was in control of it
Get the contract, claim ticket, receipt, or bill of lading
Document the property's condition before it was handed over

Hands off until the expert arrives. Nothing at the scene gets touched, moved, repaired, or thrown out until the origin and cause investigator has secured it. Evidence that's moved early can sink the whole recovery.

Notify

Notify the business in writing, and meet any claim deadline in the contract
Notify its carrier
Ask the business to keep its records, video, and the damaged item

Investigate

Request the business's incident reports, logs, and video
Inspect the damaged property
Read the contract for liability limits, declared value options, and claim deadlines

Demand

Review payments and out-of-pocket costs
Sort the supports into photos, estimates, invoices, and reports
Send the full demand packet

Negotiate

Put the burden on the business to explain the damage
Follow up, and use a tolling agreement if the deadline is close
If liability is accepted, negotiate. If not, review for ADR.

Settle

Review the release
Receive payment, issue the deductible and client payments
Final file review, then close

1. Identify

Common losses

Business	What goes wrong
Movers	Furniture, art, and electronics damaged or lost in transit, and damage to the home during the move
Storage units and warehouses	Water leaks, fires, pests, break-ins, and missing items
Auto repair and body shops	Vehicles damaged, stolen, or burned while at the shop
Dry cleaners and tailors	Garments damaged or lost
Valets and parking garages	Vehicles damaged or stolen while parked
Jewelers and repair services	Items lost, damaged, or swapped

Responsible parties to consider

The business that had the property
Its employees, like the driver or valet
A subcontractor, like a moving crew the company hired
The building owner, if a leak or fire started outside the business's space

The legal name for this

This is called a bailment. The owner hands over property, and the business agrees to keep it and give it back. When the business is paid, it usually has to use reasonable care. In many states, proof that the property went in fine and came back damaged shifts the burden to the business to show it was careful.

2. Notify and investigate

Read the contract closely

Liability limits. Movers, cleaners, and storage units often limit what they pay per item or per pound.
Declared value. Did the insured have a chance to buy more protection?
Claim deadlines. Some contracts require written notice within days or months.
Arbitration clauses.

Interstate moves have special federal rules that set how claims and liability limits work. Check them for any move across state lines.

Evidence checklist

Contract, receipt, claim ticket, or bill of lading
Inventory or condition report at hand-off
Photos of the property before it was handed over
The business's incident report, logs, and video
Photos and repair estimates for the damage
Police report for theft

3. Demand, negotiate, and settle

Liability theories

Failure to use reasonable care, with the burden on the business once damage is shown
Breach of contract
Negligence of the business's employees
Statutes that apply to specific businesses, like movers and warehouses

Defenses to expect

Defense	How to answer it
The contract limits our liability	Check whether the insured agreed to it, whether a higher value was offered, and whether the state enforces it for negligence
The damage was already there	The condition report and before photos
We weren't negligent	The business has the records and the video. Ask them to explain what happened.
The claim was late	Check the contract deadline, and whether the business had actual notice

Negotiating and settling

Keep demands to the value you can prove, and watch the contract limit.
Review the release with the release checklist.
Close with the standard closing letter and the deductible reimbursement letter.

4. Letters for this loss

Step	Letter	Sent to
Identify	Subrogation Opening Letter to Insured	Insured: contract, receipt, before photos
Notify	Notice of Subrogation Interest and Insurance Request	The business
Notify	Notice of Subrogation Interest to Adverse Carrier	The business's carrier
Investigate	Evidence Preservation and Joint Scene Exam Notice	Business and carrier
Demand	Subrogation Demand to Adverse Carrier or to Responsible Party	Carrier or business
Negotiate	Second Demand with Escalation Notice, Tolling Agreement Request	Carrier or business
Settle	Release Review Checklist, Closing (Made Whole) or Pro Rata, Deductible Reimbursement	Client and insured
No recovery	No Recovery Closing Letter	Client, for example when an enforceable contract limit makes recovery too small

Sources