1. Forms
2. IH
3. IH-DS-93

What the form is

The IH DS 93 Processors Declarations is an advisory form used in conjunction with the IH 00 93 Processors Coverage Form. It is not a standalone policy but rather a supplementary declarations page that provides specific details pertinent to the processors coverage. This form includes spaces for the name of the insurance company providing the coverage and the agent or broker producing the business. A key function of this declarations page is to list the names and addresses of all processors where the insured's covered property is or may be located. It's important to note that general information such as the named insured, mailing address, policy period, and description of the insured business are found on the Common Policy Declarations (IL DS 00), not on the IH DS 93.

Classes of business it applies to

This form, as part of the Processors Coverage, is particularly useful for industries that frequently use offsite processors as part of their manufacturing or operational strategy. It applies to businesses that send their property to third-party specialists for various types of work. Examples include:

• Manufacturers sending components for specialized finishing, assembly, or treatment (e.g., plating, heat treating, dyeing).
• Businesses that utilize external facilities for packaging or other value-added services before products are ready for sale.
• Industries where raw materials or semi-finished goods are regularly moved between the insured's premises and a processor's location.

Special considerations

There are several important points to consider when using the IH DS 93 and the associated Processors Coverage Form:

• Processor Listing: While the IH DS 93 provides space to list processors, the underlying coverage form (IH 00 93) does not necessarily restrict coverage only to those processors listed on the declarations. However, it is good practice to list all known processors.
• Contractual Agreements: The contract between the property owner (the insured) and the processor is crucial. This agreement should clearly define each party's responsibilities, including who is responsible for insuring the property while it is at the processor's location or in transit, and the extent of that responsibility.
• Valuation: The valuation of property under the Processors Coverage Form is a key aspect. If a loss occurs before processing is complete, the value of the property includes the value of labor, materials, or services already furnished by the processor, provided the named insured has paid or is obligated to pay for them. However, the value will not exceed the replacement cost.
• Covered Property: The associated coverage form (IH 00 93) covers the named insured's owned property and property of others for which the named insured is legally liable, limited to the property described on the declarations, while in the care, custody, or control of the processor or in transit to or from that processor.

Key information for agents and underwriters

Agents and underwriters should pay close attention to the following when dealing with the IH DS 93 and Processors Coverage:

• Identification of Processors: Agents should work with the insured to identify all locations where property is sent for processing to ensure the declarations are as accurate as possible.
• Risk Assessment: Underwriters need to assess the risks associated with each processor's operations, the nature of the work being performed, and the controls in place at the processor's location. The transit exposures to and from processors also need evaluation.
• Coverage Adequacy: Ensure the limits of insurance are adequate to cover the value of the property at all processor locations and while in transit, including the value added by the processor. Coinsurance provisions may apply if property is underinsured.
• Understanding the Coverage Form (IH 00 93): The IH DS 93 is only a declarations page. A thorough understanding of the IH 00 93 Processors Coverage Form, including its covered property, property not covered, covered causes of loss, exclusions, and conditions, is essential for both agents advising clients and underwriters assessing risk. For example, loss or damage caused while property is being worked on is generally excluded, unless a fire or explosion results.