what is a warehouse bond 
a warehouse bond provides financial protection for individuals or businesses storing goods in a storage facility the bond gives protection for any losses if the event the storage facility fails to live up to the contract terms if the operator of the warehouse fails to meet its contractual obligations a third party surety company acting as an intermediary will compensate the client for loss understanding warehouse bondsthe warehouse bond is a contract between three entities the warehouse operator is the principal that needs to get bonded the state authority that provides the licensing is the obligee finally the surety is the bond underwriter warehouse bond claims may arise from fire theft water damage roof collapse insufficient facility maintenance damage during handling climate control failure lost inventory and other causes warehouse bonds typically remain in effect for one year periods and must be renewed annually warehouse bonds are required for warehouse owners in many states they guarantee compliance with state laws and regulations for the storage and handling of goods every state sets its bond amount requirements items reviewed when setting the bond amount include the number of warehouses operated and the value of the goods stored in the warehouses bond requirements may also be on a case by case basis in some states the bond cost also depends on the warehouse owner s credit score and business financials each state will stipulate requirements for storage facilities independently for example massachusetts requires all public warehouse owners to be licensed and bonded with a 10 000 surety bond for every warehouse 1 the state of new york requires a 5 000 bond amount while new york city requires 10 000 2 3 bond requirements may also vary depending on the type of warehouses such as grain eviction or public warehouses special considerations and acts of godthere are many limitations on recovery associated with warehouse bond agreements for example acts of god are often listed as an absolute exclusion in agreements although a warehouse owner cannot reasonably be expected to control forces of nature such as hurricanes and earthquakes there are certain circumstances where liability is a consideration for example a warehouse operator may be liable for damages if there is a warning of an impending loss that they should have taken steps to avoid suppose a warehouse location is along a river prone to flooding and the facility previously sustained damage to cargo stored on the ground floor in such a scenario if a warehouse owner knew of an approaching flood warning and took no action they could be found negligent for failing to move the cargo to a higher floor or alternate location 