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Transportation Brief: Warehouse Claims – How to Respond, Defend, Settle

by Eric J. Meyers, Kevin  M. Phillips

Mar 21, 2017

Upon receiving a claim from a customer, a warehouse should first notify its insurer. It is imperative to satisfy the policy’s timely notice requirement should coverage be available. The warehouse should assess the claim, including the type of damages sought, and confirm the depositor has provided proper notice of claim by adequately identifying the goods or shipments involved. If the claim was not presented in a timely fashion, the terms of the contract or warehouse receipt may prohibit recovery. Next, the warehouse should determine if the contract provides for a limitation of damages. If the amount sought exceeds the damage limit, the warehouse may have a basis for enforcing this limit. Also, an assessment must be made of whether the claim seeks consequential damages (e.g., lost profits, investigative costs, chargebacks) that may not be recoverable under the contract. Finally, when agreeing to pay a claim, especially when the warehouse has used reasonable care in storing and handling the goods, it is critical to have the customer sign a release acknowledging the specifics of the claim and protecting the warehouse from subsequent estoppel arguments regarding waiver of the reasonable care standard.

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