We should be able to operate in the insurance realm under a safe set of assumptions. First, our customers should want proper protection. Second, they should be served by insurance professionals using their skills to assist in evaluating coverage needs. Third and finally, when a customer becomes a client, they should be willing to pay for it. There is a practical consideration for businesses that wish to cover property that has fluctuating value, such as goods and inventory. Property coverage is effective when policy limits reflect its value. It can be messy when the alignment between the two amounts is poor.

Click here. It takes you to a case where a serious valuation problem arose. You may be surprised by the court's position on how a loss should be handled.

Retailers and wholesalers are particularly prone to volatility in the amount of merchandise on hand. Insurance coverage with static limits would undergo a constant cycle of providing either far too little or far too much protection. In such cases, insureds should embrace any method that would allow them to share information with its insurer about merchandise exposed to loss throughout a policy period. The court dispute above mentions a popular and practical method for handling changing levels of business personal property, a reporting form.

Click here to see a discussion of Insurance Services Offices Form CP 13 10, Value Reporting Form. It is from our commercial property section of PF&M Analyses found in Advantage Plus.

Reporting forms do create an additional coverage obligation for insurers. It takes more effort to monitor and document a coverage flow rather than establishing, essentially, a stated limit. The sufficiency of the latter only requires periodic changes (generally at a policy's renewal).

Regarding the insured, the chief obligation is adhering to the reporting process used to amend their business personal property protection. They begin by selecting an option to secure the benefit of more accurate coverage and fairer premiums. Next, the benefits are preserved by making reports on time and in the required manner. It could be said that the reporting obligation is an extension of another part of their commercial property coverage.

Click here to see a discussion of the Insured's Duties In The Event Of Loss provision from Gordis on Insurance found in Advantage Plus.

Naturally, a key element of correctly determining coverage needs is assessing exposures. An accurate and completed application is an important first step in gathering details. Of course, the information could be insufficient. Further, applications are only good once a potential client makes a purchase decision and you often have to develop full information on prospects.

What may be particularly helpful is to approach clients and engage them in probing their operations. It is a shared process between the client and an insurance professional. It succeeds when the expert on the applicable business (client) is assisted by the party (insurance professional) who recognizes exposures related to that business. Did someone say, we could use a questionnaire?

Click here to see an excerpt from the Clothing Stores business personal property section in the Commercial Risk Survey found Advantage Plus.