Who is referred to as a bailee in insurance terms?

Who is referred to as a bailee in insurance terms?

• A. A person who owns property
• B. A person who holds property for another
• C. A person who insures property
• D. A person who loses property

Answer: (B)

In insurance terminology, a bailee is defined as a person who holds property for another individual, known as the bailor. This relationship typically arises when property is transferred temporarily for a specific purpose, such as storage, repair, or transportation. The bailee has the responsibility to take care of the property and return it to the bailor after the purpose is fulfilled. This creates a legal obligation where the bailee must provide reasonable care to protect the property and may be held liable for damages if they fail in this duty. This understanding sits at the core of many insurance concepts, as bailment arrangements often necessitate coverage considerations to understand risk management related to the property while it is under the bailee's control. In contrast, the other options refer to entities that do not fit the definition of a bailee as they do not involve the temporary custody of property for another's benefit.

In insurance terminology, a bailee is defined as a person who holds property for another individual, known as the bailor. This relationship typically arises when property is transferred temporarily for a specific purpose, such as storage, repair, or transportation. The bailee has the responsibility to take care of the property and return it to the bailor after the purpose is fulfilled. This creates a legal obligation where the bailee must provide reasonable care to protect the property and may be held liable for damages if they fail in this duty.

This understanding sits at the core of many insurance concepts, as bailment arrangements often necessitate coverage considerations to understand risk management related to the property while it is under the bailee's control. In contrast, the other options refer to entities that do not fit the definition of a bailee as they do not involve the temporary custody of property for another's benefit.