How to Complete the ACORD 126 Products and Completed Operations Section

ACORD 126 Products and Completed Operations Section

The Products / Completed Operations section of the ACORD 126 is the bottom half of the second page.

PRODUCTS / COMPLETED OPERATIONS

The first section asks for a description of individual products. Even small manufacturers probably have more than three products. You will most likely need to use the ACORD 101 form to list more products. Or you could use a spreadsheet and attach it to the application.

There is also wording on the application asking you to include any literature, brochures, labels, warnings, etc.

There are seven columns for each listed product.

1 - PRODUCTS - give a brief description of the product. I would include the product's name.

2 - ANNUAL GROSS SALES - this would be the dollar amount of sales rounded off to a reasonable number.

3 - # OF UNITS - use a numeric entry. Rounding off is acceptable.

4 - TIME IN MARKET - This is from the date this product was first sold to an intended end user. If there have been several generations of this product, and those generations have significant product changes, I suggest you list these generations as separate products.

5 - EXPECTED LIFE - how long does the manufacturer expect this product to continue to be used?

6 - INTENDED USE - a brief description of how the manufacturer thinks people should be using this product.

7 - PRINCIPAL COMPONENTS - in creating this list I am certain the underwriter would like to know if any of the components are made by other manufacturers and simply assembled by your insured. That will lead to your underwriter asking about the insurance carried by that component provider. You might as well anticipate that question and answer it in advance if possible.

The limited space provided on the ACORD for really does argue for you to create a spreadsheet for this information.

GENERAL QUESTIONS ON PRODUCTS / COMPLETED OPERATIONS

There are ten yes or no questions as of this writing (6/6/2014). If the answer to any question is yes you will need to use the space under the question to enter an explanation. If you need more room use the REMARKS section of this form.

1 - DOES APPLICANT INSTALL, SERVICE OR DEMONSTRATE PRODUCTS? It is hard for me to understand how the answer to this question could ever be No.

2 - FOREIGN PRODUCTS SOLD, DISTRIBUTED, USED AS COMPONENTS? (If YES, attach ACORD 815) Foreign products refers to products imported into this country as opposed to products exported to other countries.

3 - RESEARCH AND DEVELOPMENT CONDUCTED OR NEW PRODUCTS PLANNED? If your insured is not doing this then they are probably not going to be in business for the long term.

4 - GUARANTIES, WARRANTIES, HOLD HARMLESS AGREEMENTS? You might as well include copies of any written documents on these. Your underwriter will certainly ask for them.

5 - PRODUCTS RELATED TO AIRCRAFT/SPACE INDUSTRY? That would be pretty cool. Especially if you were insuring things in outer space. Read the policy definition of territory of coverage.

6 - PRODUCTS RECALLED, DISCONTINUED, CHANGED?

7 - PRODUCTS OF OTHERS SOLD OR RE-PACKAGED UNDER APPLICANT LABEL?

8 - PRODUCTS UNDER LABEL OR OTHERS?

9 - VENDORS COVERAGE REQUIRED? Your underwriter will also ask about required certificates of insurance.

10 - DOES ANY NAMED INSURED SELL TO OTHER NAMED INSUREDS?


I hope this helps you learn how to complete the ACORD 126 Products and Completed Operations section.