State Farm Insurance License Practice Exam

What is a key feature of the bailee's customers policy?

1. Coverage regardless of liability

2. Only covering physical damage

3. Partial coverage limited to specific risks

4. Excludes coverage for theft

The correct answer is: Coverage regardless of liability

A key feature of a bailee's customers policy is that it provides coverage regardless of liability. This means that the policy is designed to protect the property of clients or customers that a bailee (such as a dry cleaner or repair shop) has received for care, custody, or control, even if the bailee is not at fault for any damage or loss that occurs. This type of coverage is crucial because it offers peace of mind to business owners, ensuring that they are protected from financial loss associated with their customers' property while it is in their possession. In contrast, options that suggest limitations on coverage—like only covering physical damage, providing partial coverage limited to specific risks, or excluding theft—do not reflect the comprehensive nature of bailee's customers policies. These options imply restrictions that would undermine the policy's primary purpose of assuring full protection for the custodian of clients' property, regardless of fault or the nature of the loss.