manufacturer's output policy (MOP)
A broad all-risk policy that provides a combination of commercial property
and commercial inland marine coverages manufacturers and many other businesses
need. MOPs were developed in the mid-1950s, as a method of insuring in a single
policy stock both during the manufacturing process and in transit. Because the
MOP's combination of commercial property and commercial marine coverages met
the needs of many different types of organizations, MOP eligibility also expanded
over time, to include many industrial, processing, and commercial operations.
In recent years, the term "commercial output policy" and the "COP" acronym have
begun to replace the term "manufacturers output policy" and the "MOP" acronym
in the commercial insurance arena since they more accurately reflect the wide
range of organizations that can be insured under this type of policy. The American
Association of Insurance Services (AAIS) offers standard COP forms and rules
for use by its member insurers. In addition, many insurers have developed their
own COP forms and rules. COP premiums are typically developed using a distinctive
rating system (referred to as a "deficiency point rating system") that allows
many insurers to be more competitive using a COP than they could be using a
standard commercial property policy.
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