1. Forms
2. CM
3. CM-00-22

What the form is

The CM 00 22 Equipment Dealers Coverage Form is an Insurance Services Office (ISO) inland marine form that provides "all risk" or open perils coverage for an equipment dealer's stock in trade, primarily consisting of mobile agricultural and construction equipment. It also covers similar property of others that is in the dealer's care, custody, or control. The coverage applies to property located at the insured's premises (both inside and outside buildings), while in transit, and at other specified locations.

Classes of business it applies to

This form is specifically designed for businesses that primarily sell mobile agricultural equipment (like tractors and combines) and construction equipment (like bulldozers and forklifts). Examples include farm implement dealerships and construction machinery dealers. While developed for these specific dealer types, it can sometimes be used by other businesses, such as department or discount stores, but only for their inventory of mobile agricultural and construction equipment, with other property needing to be excluded.

Special considerations

• The form can be written on either a non-reporting basis or a reporting basis. If written on a reporting basis, endorsement CM 99 02 is typically attached, requiring the insured to periodically report the values of their inventory.
• Coinsurance conditions apply, and it's crucial that the limits of insurance are adequate to meet these requirements to avoid penalties at the time of a loss.
• The form contains specific exclusions, such as for property leased, rented, or sold after it has left the insured's custody, and for certain types of property like automobiles, accounts, and currency.
• It's important to note that this form covers "direct physical loss of or damage to" covered property.
• The named insured must keep accurate business records and inventories.

Key information for agents and underwriters

• Risk Assessment: Underwriters need to carefully assess the types of equipment being insured, the values at risk (both at premises and in transit), security measures at the dealer's locations, and the dealer's inventory management practices.
• Reporting vs. Non-Reporting: Deciding between a reporting or non-reporting form depends on the fluctuation of inventory values. Reporting forms can help manage premiums more accurately for businesses with changing stock levels but require diligent reporting from the insured.
• Coverage Gaps: Agents should be aware of potential coverage gaps, such as property leased or rented to others (which may require separate coverage), and ensure the insured understands the exclusions. The form does not cover loss of use payments for property of others.
• Related Endorsements: Consider the need for endorsements like CM 99 01 for "Additionally Covered Property" (e.g., furniture, fixtures, tools) or CM 99 02 for reporting provisions.
• Valuation: Understanding the valuation basis for the covered equipment is important for determining appropriate coverage limits and settling claims.
• Policy Construction: This form is part of a larger policy and must be used in conjunction with declarations pages (CM DS 02, CM DS 06), common policy conditions (IL 00 17), and commercial inland marine conditions (CM 00 01).