What it does
CM 00 22 covers a dealer's stock in trade consisting principally of mobile agricultural and construction equipment, plus similar property of others in the dealer's care, on an open-perils basis anywhere in the United States, its territories, Puerto Rico and Canada. Equipment on the lot, at shows, at customer sites for demonstration and in transit is covered until it leaves the dealer's custody after sale, lease or rental.
Who needs it
Farm and construction equipment dealers (often franchise dealers for major brands). Floor plan lenders frequently require the dealer to insure inventory, and the dealer form is one way to meet that requirement; ISO's floor plan form CM 00 52 is the other.
Key provisions
- Not covered: automobiles, motor trucks, motorcycles, aircraft and watercraft; money and securities; property being manufactured; property leased, rented or sold once it leaves the dealer's (or the dealer's carrier's) custody; furniture, fixtures, tools and improvements; property of others described in the declarations; contraband.
- Extensions: debris removal (within the limit up to 25% of loss plus deductible, with up to $10,000 more per location when the limit is exhausted), pollutant cleanup up to $10,000 per 12 months in addition to the limit, and theft damage to buildings.
- Exclusions include unexplained disappearance, inventory shortage, dishonest acts, processing or work on the property, artificially generated current, and wear, mechanical breakdown, rust, dampness, cold or heat.
- Valuation: unsold stock at least of ACV, restoration or replacement; sold-not-delivered at net selling price; property of others at the dealer's liability.
- Conditions: records retained three years, annual physical inventory, protective safeguards.
Quoting and selling notes
Ask for inventory values by month, lot security (fencing, lighting, GPS trackers), the share of rental fleet versus sale stock (rented units leave coverage once out of the dealer's custody, so a contractors equipment or rental form is needed), and demonstration practices. Use CM 99 02 to report values instead of coinsurance.
