Property Insurance – 2 Overlooked Coverages

Joe Buick - Vice President

Joe Buick – Vice President

For approximately 50% of commercial insurance buyers, your renewal date of 1/1 is fast approaching. This year when updating your exposures specifically relating to property insurance please consider the a couple of items that are often overlooked.

Selling Price Clause

For manufacturers, distributors, retail establishment and others  valuing  finished goods or goods for sale is important. Often insurance buyers don’t consider the fact that many insurance carriers  offer the SELLING PRICE option. Would you like to collect cost of your inventory plus the markup that you would charge to keep the lights on? For many, this profit could be anywhere from 5 to 100% depending on the business. This could mean thousands of dollars that are on the line. Whether you are a machine builder selling $1,000,000 items or a widget manufacturer, the selling price clause when included will pay you the actual selling price of your goods if they are lost or damaged due to a covered claim. Also keep in mind, your property policy may already include this coverage feature….are you accounting for this because this is how a claim will be settled.

Personal Property of Others

 Did you know that most un-endorsed Liability policies exclude coverage for property of others in your care custody or control?  So if you have a covered claim at your insured location that wipes out all of your property and property of others entrusted to you (i.e. tooling, consignment inventory, vehicles of others, work in progress) your third party  liability policy will not pay for others stuff that is lost. This is true even if you have signed a contract stating that you are responsible for it.  You need to schedule this property of others on your property policy. I recommend that when adding this to your policy that you create a separate accounting for this to properly keep track of it. Some property policies will include a sub-limit for other’s property and often this limit is too small.

These two items that are either overlooked or underinsured could negatively impact your claim, and if they are large enough they may even cripple it. Has your agent reviewed with you Selling Price Clause or Personal Property of Others within your property policy?