Summary: Generally, retailers can cover stocks of inventory through use of the commercial property form. However, by using the commercial inland marine program, merchants dealing principally in camera and musical instrument equipment can arrange more specific, open perils coverage. The form used is the Camera and Musical Instrument Dealers Coverage form, CM 00 21 03 10. The coverage may be written on a nonreporting or a reporting basis, and the coverage is for property while at the premises of the insured or in transit. Dealers engaged primarily in manufacturing operations may not be insured under this form.

Like other coverage forms in the Insurance Services Office (ISO) commercial inland marine program, the form is combined with a declarations page, a common policy conditions form, and an inland marine general conditions form to make a policy.

This article discusses the coverage agreement, exclusions, and conditions of the current edition (March 2010) of form CM 00 21. There have been minor changes between the 2008 form and the 2010 form; these will be highlighted.

Topics covered: Coverage Exclusions Limits of insurance Deductible Additional conditions Coverage options Declarations page

Coverage

We will pay for direct physical loss of or damage to Covered Property from any of the Covered Causes of Loss.

1.Covered Property, as used in this Coverage Form, means:

a.Your stock in trade consisting principally of cameras or musical instruments and related equipment and accessories; and

b.Similar property of others that is in your care, custody or control.

Analysis

This form covers the named insured's stock in trade and similar property of others in the insured's care, custody, or control. Such property consists, principally, of cameras or musical instruments and related equipment and accessories. This definition is broad enough to include miscellaneous items that a merchant may carry for the accommodation of customers, for example camera bags, film, and accessories.

The definition is also broad enough to provide coverage for property in stock or for sale in mixed operations where the inventory maintained is primarily camera or musical instrument equipment, but other goods are also offered for sale. For example, a camera equipment retailer whose inventory is 75 percent camera equipment but also sells televisions or video recordings could use this form to insure all of the stock. Remember, as long as the property consists principally of cameras or musical equipments, there is also coverage for other stock in trade. The value of such miscellaneous stock must, of course, be included in determining the amount of insurance required.

A stipulation in the commercial lines manual rules provides that when written for a camera or musical instrument department of a department or discount store, coverage under CM 00 21 does not apply to stock that is not usual to the insured department and the policy must be amended to reflect this. Thus, stock from another department that is temporarily on display in the camera or musical instrument department is not covered under this form.