How could a margin clause affect your business?
A margin clause is a nonstandard commercial property insurance provision. When a margin clause is in force it states that the most the insured can collect for a loss at a given location is a specified percentage of the values reported for that location on the insured’s statement of values. The maximum is normally stated as a percentage that is greater than 100%, such as 110% or 125%.
A margin clause may be used alone or along with another nonstandard commercial property insurance provision, such as a per occurrence limitation of liability provision. A per occurrence limitation of liability provision is even more restrictive than a margin clause. It establishes that the most the insured can collect for a commercial property loss at a given location is the amount reported for that location on the insured’s statement of values.
When the two provisions are used together, the margin clause increases the amount that the insured could otherwise collect. Both provisions are typically attached to policies with blanket limits, so that they essentially convert blanket limits to specific, per location limits.
Have questions about a margin clause? Please contact an ALIGNED Insurance Advocate or connect with us at www.alignedinsurance.com today.
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