Customer ownership does not by itself confirm coverage. Property, transit, liability and contract wording must be checked for the actual goods, locations, values and causes of loss.
Inventory everything held for others
Include raw material, castings, forgings, plastic blanks, work in process, finished parts, dies, moulds, jigs, fixtures, gauges, patterns, prototypes, drawings and reusable packaging. Separate property supplied for one job from tooling stored between production runs.
- Description and legal owner
- Quantity and value at each production stage
- Shop, storage and outside-processing locations
- Contractual responsibility for loss or damage
- Property that is unique or difficult to replace
Measure the maximum value at risk
Annual throughput is not the same as the greatest amount exposed to one event. Estimate peak customer values by building, room, storage area, machine, vehicle and outside processor. Include seasonal builds, large releases and situations where several customers’ property accumulates together.
Value can increase as work progresses
A blank or casting may gain machining, outside processing, inspection and delivery costs before it becomes a finished part. A custom die or mould may be difficult to recreate even when its original invoice is known. Ask how the contract values property at different stages and what documentation would support the amount.
Follow property beyond the shop
Customer goods may move to heat treaters, coaters, testing facilities, customer plants or storage locations. Record who arranges transport, who has custody, values per shipment, packaging, carriers, security and the exact hand-off points. Coverage at the main premises does not automatically answer every transit or off-site question.
Read bailment, purchase-order and storage terms
Contracts may assign responsibility for custody, inspection, insurance, delay, scrap, rework, replacement and disposal. Give those requirements to the broker and use legal counsel for obligations beyond the insurance wording. Do not rely on ownership labels alone.
Property damage and liability are separate questions
Damage to customer property in the shop may involve property wording, while an allegation that completed work damaged other property may involve liability. Rework, loss of use, delay and pure financial loss may be treated differently again. Identify the event and each resulting cost before deciding which coverage is relevant.
Loss prevention should match the concentration
Use identification, segregation, inspection, access control, suitable storage, handling procedures, lifting plans, fire protection, environmental controls and documented releases that fit the property involved. Operational controls help describe the risk but do not guarantee coverage or insurer acceptance.
Prepare the customer-property schedule
For each category, record the owner, description, maximum value, location, time held, process stage, transport method, contract, storage control and replacement difficulty. Revisit the schedule when a new customer, program or long-term storage arrangement changes the concentration.
Common questions
Is customer property covered under ordinary business contents?
It depends on the property definition, insurable interest, cause of loss, location, valuation, limits and exclusions. List the goods and ask where the applicable wording and limit appear.
Should stored customer dies and moulds be included?
Yes. Include tooling held between runs or considered inactive. Record ownership, values, location, inspection, security, contractual responsibility and the disposal authorization process.
What value should be used for customer materials?
Use a supportable amount that reflects the applicable contract and production stage. Raw material cost, accumulated work, replacement cost and contractual value can differ, so confirm the valuation basis with the broker and customer records.
Does customer property remain covered at an outside processor?
Not automatically. Transit and off-site locations must be checked against the policy, limits, territory, causes of loss and custody arrangements. Record each processor and maximum value sent there.
Primary sources
Safety sources explain the operation, not whether insurance will pay a claim. Use the current insurance contract and its certificate or summary page when making a coverage decision.
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