Bailee Insurance offers protection for which of the following situations?

Bailee Insurance specifically provides coverage for situations where property is in the temporary custody of another party, which is precisely what option C describes. This type of insurance applies in cases where one person or business (the bailee) has possession of someone else's property (the bailor) for a specific purpose, such as repair, storage, or transport. The insurance is designed to protect the bailee against claims of loss or damage to the property they are holding, ensuring that they can fulfill their obligations to the property owner.

While the other options mention scenarios that involve the potential loss or damage of personal property, they either do not pertain to the specific relationship defined under bailee and bailor or fall outside the standard coverage areas addressed by bailee insurance. For instance, loss of personal items at an event, damage to a car while being repaired, and theft of goods in transit may involve different types of insurance, such as personal property insurance, auto repair insurance, or transportation insurance, rather than the specific liability coverage that a bailee would hold.