...with some national retail chains. Some retail stores only allow their salvage to be sold in certain states. Also, some labels can’t be removed without damaging the item. Take a logo “service mark” on the front of men’s polo shirts. It can’t be cutout because it would leave a hole in the shirt. It can’t be marked-out without blemishing the look while being worn.
An insured may have a pre-loss contractual agreement that addresses responsibility of goods not owned by the insured while in the possession of the insured. The insurance policy is usually bound to the terms of such a pre-loss agreement.
There is an ice cream company that now has wording on all its bill of ladings for all trucking companies shipping their product…“in the event of a claim resulting from temperature variances, a 20% salvage credit will be taken. Further, all damaged ice cream will be disposed of in an appropri- ate site. No product will be allowed to be sold elsewhere.” This company had three freezer claims over a four-year period and in each case, the ice cream was resold, to their dislike. After going through the process, they changed their insurance policy and bill of ladings to restrict the distribution of salvage.
As with all contracts it is most important to read and understand its terms and condi- tions. We have seen terms and conditions in insurance policies include such caveats as an Impairment of Recovery Rights Clause . This clause protects the insurance company from paying on a loss if the policyholder impairs the rights of recovery from others by any act or agreement after such loss. Differ- ences in wording can change the interpreta- tion when it comes to your salvage and can lead to unexpected results in your insurance claim.
As every loss is unique, dealing with salvage will always be a case by case process. Be sure to carefully read your insurance policy and understand how, in the event of a loss, it ad- dresses salvage and/or brands and labels.
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ADJUSTING TODAY is published as a public service by Adjusters International, Inc. professional loss consultants. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.
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