Commercial Property and Selling Price Valuation Clause
One of the hidden advantages of the Commercial Property Form series is the built in valuation of “stock sold but not delivered” at selling price. This is automatically built into the ISO form covering Personal Property.:
Did You Know: That you must identify what percentage of stock a manufacturer has pre-sold and then evaluate that stock at “selling price” on the Commercial Property Form. This could require that the limit of insurance is significantly higher.
Did You Know: That the Manufactures Selling Price Endorsement is an endorsement to the Commercial Property Form—not the Business Income Form—and is only for “unsold finished stock”. This does not apply to pre-sold finished stock.
Did You Know: That on an BOP “sold stock” is evaluated at Replacement Cost rather then Selling Price which is a significant reduction in coverage from the Commercial Property Approach.
Did You Know: That the amount written for Business Income needs to be adjusted based on the “mark up” being covered by virtue of the selling price inclusion.
Laurie Infantino, AFIS, CISC, CIC, CRIS, ACSR, CISR
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