Seasonal stock: insure the peak, not the annual average

The decision behind the headline

This review focuses on Christmas inventory, imported goods and goods in transit.

Use a monthly stock curve instead of declaring the quietest inventory count. Suppose an illustrative shop holds CHF 40,000 of goods through summer and CHF 110,000 before Christmas. The additional CHF 70,000 is temporary but real. Ask how the policy accommodates that peak: a higher fixed declaration, an expressly agreed seasonal arrangement or another mechanism. Do not assume automatic protection merely because turnover has grown. If goods move to a temporary warehouse, record its address and security measures; a larger stock amount does not establish that a new location qualifies. Include returns and write-offs in the count.

A hypothetical scenario to test

A retailer doubles inventory before December; a water leak damages boxed goods in a basement. This is an invented example, not a reported claim or a promised payout. Reconstruct the sequence from the first sign of trouble to ordinary service resuming. Ask what would happen if the problem occurred during a holiday or at the busiest time of year. The stress test should expose assumptions about availability and timing before they are relied upon.

The inventory should separate owned goods, customer goods and goods on consignment. Include the cost basis used and the date, then reconcile movements with purchase records. A damaged seasonal product may lose its commercial usefulness after the holiday even if physically repairable. Discuss salvage and expiry without assuming a selling-price settlement. Where a promotion reduces the expected margin, explain that in the interruption forecast rather than treating every lost unit as a full-price sale. The useful comparison shows the largest amount on hand, where it sits and which valuation applies.

Identify the contractual boundary

Check who owns stock sold but awaiting delivery, and goods received on consignment. These can sit physically beside owned stock while creating different responsibilities. Discounts and perishability affect the economic loss; a pre-season inventory photograph should not substitute for a dated valuation.

Compare the wording, then the price

Use an identical scenario with each insurer and request clarification of peak declarations, temporary storage locations and stock valuation after discounts. Ask for the relevant clause and a written explanation of anything left uncertain. An optional extension should appear in the schedule, not merely in a sales discussion.

Reduce the exposure before transfer

A useful first action is to move vulnerable goods above floor level and inspect temporary storage conditions. Assign an owner, a completion date and a simple test of whether the measure works. Written procedures matter only if staff can find and use them under pressure.

Evidence and the next review

Prepare weekly inventory levels, purchase invoices and evidence of ownership. Date the records and keep an accessible copy away from the affected process. Deductible funding and the delay before a payment should sit in the continuity budget. Review the arrangement when your activity, technology, locations or counterparties change.