You were organizing a storage unit in a high-rise condo and were entrusted with the “building master” fob to access the freight elevator. You clipped it to your belt, but when you got to your car, it was gone. The Condo Board is now demanding $45,000 to rekey the entire building’s electronic access system, citing a security breach.
Key Takeaways
- The “Lost Key” Sub-limit: Most policies cap “Lost Key Coverage” at $2,500 or $5,000. This covers a single house lock, not a commercial master system.
- Consequential Damages: The physical key cost $10. The consequence (rekeying 200 doors) costs $45,000. Standard GL often fights paying for the “consequential” part without a specific endorsement.
- Bailee Coverage: Since you held the key, it was in your “Care, Custody, and Control.” As we know, GL excludes this unless you have a Bailee rider.
- Contractual Liability: Did you sign the condo’s “Vendor Key Agreement”? You likely agreed to unlimited liability.
The “Why” (The Trap): The Sub-Limit
I reviewed a “Janitorial/Organizer” policy bond and GL form.
Often, there is a “Lost Key Coverage Extension.” It sounds great until you read the limit: $2,500 per occurrence.
In 2026, rekeying a smart-lock system requires a technician at $200/hour plus hardware. A $2,500 limit is gone in 3 hours. You are personally on the hook for the remaining $42,500.
The Investigation: Master Key Coverage
I called agents to ask specifically about “Master Key” limits.
1. Travelers (Business)
- My Analysis: They offer a specific “Key and Lock Replacement” endorsement.
- The Limit: You can boost this to $25,000 or $50,000 for an extra premium.
- The Verdict: Essential if you work in commercial or multi-family buildings.
2. Surety Bond
- My Analysis: A “Janitorial Bond” might pay out for theft of a key, but usually not for losing it accidentally. It’s a dishonesty product, not a clumsiness product.
3. Generic Policy (Thimble)
- My Analysis: Great for hourly work, but the key coverage is minimal. I wouldn’t touch a master key with this policy.
Comparison Table: Rekeying Liability
| Carrier | Standard Limit | High-Limit Option | Cost of Upgrade |
| Basic GL | $2,500 | No | N/A |
| Travelers | $5,000 | $50,000 | ~$75/yr |
| Surety Bond | $0 (Accident) | No | N/A |
[IMAGE: Graphic comparing the cost of a single key copy (
10)vs.rekeyingabuilding(10)vs.rekeyingabuilding(
40k+)]
Step-by-Step Action Plan
- Retrace Steps Immediately: Use an AirTag on your key ring? Check the “Find My” log.
- Notify Security (Don’t Delay): A delay in reporting looks like negligence or theft. Report it within the hour.
- Check “Coverage Extensions”: Pull your policy PDF. Search for “Key and Lock.” See the dollar amount.
- Negotiate: Ask the condo board if they can just “deactivate” that specific fob serial number (if digital) rather than rekeying the whole building. Digital systems often allow this—don’t let them fleece you for a full rekey if a digital block works.
FAQ Section
If I lose a house key, does insurance cover the locksmith?
Yes, usually under the $2,500 limit. That is plenty for a single home.
Can I ask the client to keep the key?
Yes. “I do not hold keys” is the safest business model. Use a lockbox where the code stays with the house.
Does my bond cover this?
Only if they accuse you of stealing the key.