Georgia Property & Casualty Practice Exam

What endorsement should Jeffrey's Flowers add to its commercial property policy if it wants coverage for breakdown or contamination and power outage?

1. Ordinance or Law

2. Peak Season

3. Spoilage Coverage

4. Value Reporting Form

The correct answer is: Spoilage Coverage

Spoilage coverage is the correct endorsement for Jeffrey’s Flowers to add to its commercial property policy when seeking protection against losses due to breakdown, contamination, or power outages that negatively affect perishable goods. This type of coverage specifically addresses the risk of spoilage of perishable items, providing financial protection for inventory that may be compromised due to events like equipment failures, loss of power, or issues with temperature control. This is particularly relevant for a business such as a flower shop, where products can be highly sensitive and can spoil quickly without proper refrigeration or if damaged due to other covered incidents. Therefore, spoilage coverage ensures that Jeffrey’s Flowers is protected against the loss of inventory that would otherwise not be covered under a standard commercial property policy. The other options listed provide different types of coverage. For example, ordinance or law coverage addresses losses associated with changes in building codes or ordinances that necessitate rebuilding or repairing. Peak season coverage deals with the increased value of inventory during certain times of the year. A value reporting form is used to ensure that fluctuating values of property are accurately covered but does not specifically address spoilage incidents. Thus, spoilage coverage is the most relevant endorsement for the specific risk factors Jeffrey’s Flowers wants to mitigate.