1. Forms
2. CM
3. CM-00-21

What the Form Is

The Camera and Musical Instrument Dealers Coverage Form (CM 00 21) is a commercial inland marine insurance form designed to provide specialized coverage for businesses that primarily deal in cameras or musical instruments and their related accessories. It offers 'open perils' coverage, meaning it covers direct physical loss or damage from any cause not specifically excluded in the policy. This form is typically combined with a declarations page, a common policy conditions form (like IL 00 17), and an inland marine general conditions form (like CM 00 01) to create a complete policy.

Classes of Business It Applies To

This form is specifically tailored for retailers whose main business is selling cameras or musical instruments and related equipment. This includes:

• Camera shops selling cameras, lenses, tripods, camera bags, and other photographic equipment.
• Musical instrument stores selling guitars, pianos, drums, violins, amplifiers, sheet music, and related accessories.
• Businesses that also handle similar property belonging to others in their care, custody, or control (e.g., for repair or consignment).

It is important to note that dealers primarily engaged in manufacturing operations are generally not eligible for coverage under this form. If a camera or musical instrument department is part of a larger department or discount store, the coverage under this form does not apply to inventory unusual to that specific department.

Special Considerations

• Covered Property: The form covers the insured's stock in trade, including related equipment and accessories, and similar property of others in the insured's care.
• Transit Coverage: Property is covered while at the insured's premises or while in transit. However, there can be limitations; for example, property mailed to a customer via a carrier like UPS might not be covered under certain interpretations.
• Exclusions: Common inland marine exclusions apply. Notably, theft from an unattended vehicle is often excluded unless there are visible signs of forced entry. Other exclusions may include loss of use, loss of market, or consequential loss, as the coverage is for direct physical loss. Damage occurring during processing or work upon the property is also typically excluded.
• Reporting vs. Non-Reporting: The coverage can be written on a non-reporting basis (fixed limit) or a reporting basis, where the insured reports values periodically, and the premium is adjusted accordingly. Endorsement CM 99 02 can be used to convert the form to a reporting basis.
• Coinsurance: A coinsurance requirement, often 80%, may apply to property not in transit. This means the property must be insured for at least that percentage of its value at the time of loss to avoid a penalty.

Key Information for Agents and Underwriters

• Limits of Insurance: The policy will have several limits of insurance stated on the declarations page. These typically include separate limits for: property at each insured location, property away from insured premises in the custody of the insured or employees, property in transit, and property not at insured premises but not in transit or in the care of employees. There is also an overall aggregate limit.
• Risk Assessment: Underwriters should carefully assess the nature of the dealer's inventory, security measures at the premises (especially for high-value items), transit exposures, and any work or processing done on the property.
• Valuation: Proper valuation of the inventory is crucial, especially if the policy is written on a reporting form or if a coinsurance clause applies. Underreporting can lead to significant penalties at the time of a loss.
• Coverage Gaps: Agents should discuss potential coverage gaps with clients, such as the unattended vehicle exclusion or limitations on transit coverage, and explore if endorsements are available or if other policies are needed to address these exposures.
• Endorsements: Various endorsements can modify the coverage. For example, CM 99 02 converts the form to a reporting form. Other endorsements might address specific needs or exposures of the insured.