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What should a business that has fluctuating inventory values during the year should consider coverage written on, to avoid problems with underinsurance and overinsurance?



A. The value reporting form.
B. A replacement cost basis.
C. The business income form.
D. A blanket basis.

This question is part of Practise Exam 1
Asked by Wyatt Williams, Last updated: Jan 19, 2020

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1 Answer

John Smith

John Smith

Answered Feb 26, 2017

The value reporting form.

The value reporting form is an endorsement specifically designed for businesses with fluctuating inventory values because of seasonal variations in business or shifting inventory between different locations. When this coverage applies, the insured must report values periodically, such as monthly, and the actual amount of insurance in effect will be adjusted accordingly. The final premium will be adjusted at the end of the policy year based on average values.
 

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