Who is liable when wine or perfume is lost or damaged in a bonded warehouse, and how should insurance terms be drafted? This guide covers liability boundaries, term-drafting essentials and the claims process.
A pallet of wine collapses off a rack in the temperature-controlled zone, perfume leaks during handling, or a full lot is found short at stocktake. Cargo losses in a bonded warehouse are far more complicated than in an ordinary one: the goods are under customs supervision and duty has not yet been paid, so a single loss event raises two questions at once — who compensates commercially, and how the customs ledger is verified and whether duty is still owed. A dedicated analysis by Wincon Law Firm, Whether a Bonded Warehouse Should Pay Import Duty When Bonded Goods Are Lost During Storage, notes that such cases must be judged on the cause of loss and the goods' supervision status, and that disputes are common in practice (source: Wincon Law Firm professional article). Based on the warehousing contract chapter of the Civil Code and the Administrative Measures of the Customs on Bonded Warehouses and Goods Stored Therein, this guide sets out the liability rules, customs treatment and insurance structure importers need.
1. Liability first: "improper custody" is the basis for compensation
Bonded storage is governed by a warehousing contract. Under the "warehousing contract" chapter of the Civil Code, a custodian must take proper care of stored goods; where goods are damaged or lost due to the custodian's failure to take proper care, the custodian is liable for compensation; where damage results from the nature of the goods themselves or improper packaging, the custodian is not liable (where the chapter is silent, the rules on bailment contracts apply). Three points matter in a bonded warehouse:
- Typical improper custody: temperature or humidity failure in the climate-controlled zone that ruins wine, fire-safety deficiencies that let a fire spread, rough handling, and stock discrepancies that end in shortages — all attributable to the warehouse operator;
- Grounds for the warehouse to be excused: defects in the goods themselves, the owner's improper packaging, or force majeure — but the warehouse bears the burden of proof, so temperature logs, CCTV and in/out records are the decisive evidence;
- The owner also has duties: when handing over flammable, explosive or perishable goods (perfume, containing alcohol, falls in this class), the owner must truthfully state their nature — if loss follows a failure to disclose, the owner usually bears the consequence.
2. The bonded dimension: customs verification on top of compensation
Bonded goods have not completed import duty payment and remain under customs supervision while stored. When damage or loss occurs, the customs process runs in parallel with any commercial claim: the warehouse operator and the owner must report the facts to customs promptly, and customs determines the treatment based on the cause of loss — losses from objective causes such as force majeure are verified and written off in the prescribed way; losses attributable to the warehouse or owner may trigger duty payment or an internal-sale (tax-paid) procedure, with the exact basis determined by customs.
This is why bonded-warehouse losses turn into disputes so easily: an ordinary warehouse settles the claim and the matter ends, but a bonded warehouse must first sort out the supervision liability. Owners should reconcile stock with the warehouse regularly (see bonded inventory and ledger management) so that records match physical stock and small discrepancies are not magnified when a loss event occurs.
3. Contract first: three things to put in writing
Most liability disputes come down to what was not written down. When renting a bonded warehouse or contracting storage services, make sure the agreement specifies:
- When liability transfers: based on the inbound handover note and tally report, stating the exact point at which responsibility passes from owner to warehouse (contracting essentials in how to choose a bonded warehouse);
- The compensation basis: declared value or actual value, whether a cap applies, and required documents (purchase invoice, customs declaration, packing list) — so there is no room to argue after a loss;
- Insurance division of labor: which policies the warehouse carries, which the owner carries, the beneficiaries and deductibles, set out in the contract appendix.
4. Structuring insurance: one table, three policy types
| Policy type | What it covers | Who buys it | When it applies |
|---|---|---|---|
| Warehousing property insurance | Loss of stored goods from fire, explosion, natural disasters, etc. | Owner (insured to cargo value) | Standard for high-value wine and perfume |
| Warehousing liability insurance | The warehouse operator's legal liability for improper custody | Warehouse operator | Covers handling accidents, facility failures |
| Cargo transit insurance | Loss of goods in transit, including to/from the warehouse | Owner or carrier | When damage happens "on the road", not "in the warehouse" |
| Additional extensions | Theft, leakage, breakage, temperature-control failure | Depends on the main policy | Strongly recommended for fragile bottled wine and perfume |
One reminder: a warehouse liability policy is not coverage for your cargo — it only pays what the warehouse is legally liable for. Losses from force majeure or the goods' own characteristics remain the owner's risk. High-value cargo should be covered by the owner's own warehousing property insurance at actual value; for fragile, alcohol-containing wine and perfume, negotiate insurance terms together with the storage contract (facility requirements in perfume bonded warehouse guide).
5. After a loss: the claims sequence
When loss or damage occurs, follow four steps — stop further loss, preserve evidence, report, and claim: protect the scene and keep photos and CCTV; obtain the inbound note, tally report and temperature/humidity records; report the facts to customs; submit the loss list, customs declarations and purchase invoices to the insurer, engaging an independent surveyor if needed.
FAQ
If goods are lost in a bonded warehouse, how does customs handle it? The owner and warehouse must report truthfully to customs, which determines the write-off treatment by the cause of loss; where loss is attributable to a liable party, duty payment or internal-sale taxation may follow.
Does the warehouse pay for force-majeure losses? The warehouse can claim to be excused but must prove it (e.g. weather certificates, emergency response records); the customs verification procedures for the goods still have to be completed.
If the warehouse carries liability insurance, should the owner still insure? Yes. Liability insurance only covers the warehouse's legally liable share; owners should carry warehousing property insurance at cargo value to cover cases where the warehouse is excused.
Does perfume stored in a bonded warehouse need special declaration? Yes. Perfume contains alcohol and is a flammable good: the owner must state its nature, and storage must be in a warehouse with the required fire-risk classification (see the perfume bonded warehouse guide).
How is responsibility determined when wine deteriorates in a climate-controlled warehouse? By temperature logs and the inbound handover condition: if goods entered sound and the climate control stayed within spec, examine the goods' own condition; if climate control failed, the warehouse is responsible (technical requirements in temperature-controlled warehouse guide).
What documents are needed for a claim? Inbound handover note, tally report, customs declaration, purchase invoice, loss list and site imagery; file the full set at the time of inbound.
Sources: Civil Code of the PRC (Part III, Contract — warehousing contract chapter); Administrative Measures of the Customs on Bonded Warehouses and Goods Stored Therein (GACC Order No. 105); Wincon Law Firm, Whether a Bonded Warehouse Should Pay Import Duty When Bonded Goods Are Lost During Storage (2024 professional analysis). Data updated to 2026.
This article was written by the Yunxiu Supply Chain Research Center. Data updated to 2026. Specific terms prevail as stipulated in the insurance contract and warehousing contract; fees are subject to actual quotes.
