insurance

Keeper Liability

Legal responsibility that falls on someone who voluntarily takes possession and care of another person's property, even temporarily. In insurance terms, it refers to liability coverage for damage to property that is being kept, stored, or maintained by someone other than the owner.

Example

“The auto repair shop's keeper liability coverage paid for damage to a customer's car that was destroyed in a garage fire while awaiting repairs.”

Memory Tip

If you're the 'keeper,' you're responsible - keeper liability covers when you're keeping someone else's stuff and something goes wrong.

Why It Matters

Businesses that store, repair, or handle customer property face significant financial exposure if that property is damaged while in their possession. Without proper coverage, a business could be liable for the full replacement value of expensive items, potentially leading to bankruptcy.

Common Misconception

Many business owners assume their general liability insurance covers damage to customer property in their care, but standard policies typically exclude property being worked on or stored. Keeper liability requires specific coverage endorsements or separate policies.

In Practice

A jewelry repair shop with $500,000 in keeper liability coverage experiences a break-in where thieves steal $75,000 worth of customer jewelry being repaired. The coverage pays the full $75,000 to compensate customers for their losses, minus a $1,000 deductible. Without this coverage, the small business owner would face $75,000 in out-of-pocket payments, likely forcing closure of the 20-year-old family business.

Etymology

From 'keeper,' derived from Old English 'cēpan' meaning to seize or hold, combined with 'liability' from Latin 'ligare' meaning to bind or obligate.

Common Misspellings

Keeper LiablityKepper LiabilityKeeper LiabiltyKeeper Liabillity

Related Terms

Bailee Coverage

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