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manufacturers output policy (MOP)

A broad all risks 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"), which allows many insurers to be more competitive using a COP than they could be using a standard commercial property policy.


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