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Deterioration of Stock (DOS) Insurance
Deterioration of stock in cold storage insurance is designed to meet the requirements of those who want to insure themselves against deterioration of goods in cold storage
due to a breakdown of refrigerating machinery. Two different methods of preservation include:
- cold storage under freezing conditions
- cold storage under cooling conditions.
In the case of cold storage under cooling conditions, two types of cold storage must be distinguished; storage in a normal atmosphere and storage in a controlled atmosphere (CA storage). The storage atmosphere in the CA storage rooms is different to that of normal atmospheric air and contains approximately 22% carbon dioxide, 4% oxygen and 74% nitrogen.
The insurance of stock in cold storage is important, for example for:
- Owners of cold-storage houses
- Users (tenants) of cold-storage houses
- Firms in which agricultural products are manufactured or processed
- Meat and fish processing industry
- Food preservation industry
- Chemical and pharmaceutical industries (finished and semi-finished products)
All goods suitable for storage in cold-storage houses may be covered, the largest category being food.
Deterioration of Stock insurance is a follow-up cover to Machinery Insurance and may only be taken out in connection with the latter.
Causes of an indemnifiable claim for deterioration of stock may be:
- A rise or fall in cooling temperature or
- The unforeseen and sudden escape of refrigerants into the cold-storage rooms or
- In the case of CA storage, an incorrect composition of the storage atmosphere directly resulting from any material damage to the refrigeration plant which is indemnifiable under the Machinery Insurance.
It is possible to extend the Deterioration of Stock cover to include deterioration due to failure of public power supply, provided the position regarding public and back-up power supply is found to be satisfactory.
The rating of the risk of deterioration of stock kept in a normal atmosphere is based entirely in the no-claims period which is determined by various factor, such as.
- Quality of the refrigeration plant insulation
- Storage temperature
- Type of goods stored.