Peak Season Inventory: The Solution

 Businesses with inventories that fluctuate significantly over the course of a year present an interesting challenge. In many cases a business will experience large peaks in inventory at specific intervals during the year. Some small package policies, such as the Businessowner Policy, or BOP, automatically provide peak inventory coverage, but with some caveats. This unique coverage feature, sometimes found in these smaller package policies, applies only when the chosen business personal property limit is equal to at least 100% of the actual average monthly business personal property values, determined at the time of loss. Also, even if the chosen property limit carried is equal to 100% of the actual average personal property amount, the automatic increase, usually 25% of the chosen business personal property limit, may not be adequate to cover the increase in inventory. There is no extra charge for this coverage and generally the inventories are fairly level for the types of businesses that qualify for these small package policies.

For businesses with inventories that fluctuate significantly, there is an endorsement that will provide an increase in the property limit during the specific intervals chosen. This allows the business to take advantage of paying lower premiums for most of the year, yet having the assurance during those peak intervals that the business will have enough coverage. This approach is a practical solution for the business with predictable inventory increases at specific times. The policyholder determines the amount of limit increase and the interval for which it applies. This can include multiple peak intervals and different peak inventory levels. It can be difficult in some cases to determine when these peak intervals occur, so the policyholder should be certain to include an adequate number of days both before and after the peak interval.  Contact us with any questions or concerns - we're here for you.


Reichley Insurance Agency is committed to excellence. We pride ourselves on offering our clients reliable coverage and great service. As an independent Ohio insurance agency, we can provide you with all types of insurance coverage from the top carriers in the country. Our team of trusted agents will work with you to find a policy that meets your needs – and falls within your budget.

 

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The information in this article is meant as a guideline only. There is nothing in this publication that alters the coverage or interpretation of any specific policy. Because some statements are generalizations, and because different companies’ policies contain slight differences, please refer to your specific policy. Call our office before making any judgments or decisions concerning your particular situation and coverage that may or may not apply.