126.27 Grain warehouse keepers; insurance.

(1) Fire and extended coverage insurance. A grain warehouse keeper licensed under s. 126.26 (1) shall maintain fire and extended coverage insurance, issued by an insurance company authorized to do business in this state, that covers all grain in the custody of the grain warehouse keeper, whether owned by the grain warehouse keeper or held for others, at the full local market value of the grain.

(2) Insurance cancellation; replacement.

(a) No person may cancel an insurance policy required under sub. (1) unless that person serves a written notice of the intended cancellation on the department at least 30 days before the cancellation takes effect.

(b) Whenever an insurance policy under sub. (1) is canceled, the grain warehouse keeper shall replace the policy so that there is no lapse in coverage. Within 20 days after a cancellation notice under par. (a) is served on the department, and at least 10 days before the cancellation takes effect, the grain warehouse keeper shall provide the department with proof of the replacement policy. The department may accept, as proof, a certification provided by an insurance company licensed to do business in this state.

(3) Insurance deductibles. An insurance policy does not comply with sub. (1) if it contains any deductible clause that limits the insurer's obligation to pay to each depositor the full value of the depositor's covered losses under the policy. The grain warehouse keeper may agree to indemnify the insurer for a portion of each depositor claim that the insurer pays under the policy if the agreement does not limit the insurer's obligation to pay each depositor the full amount of the depositor's covered losses.

(4) Insurance disclosures. A grain warehouse keeper licensed under s. 126.26 (1) shall disclose all of the following to a depositor if the depositor requests that information:

(a) The material terms of the grain warehouse keeper's fire and extended coverage insurance policy under sub. (1).

(b) Whether the grain warehouse keeper has liability insurance covering the grain warehouse keeper's grain operations, and the material terms of that liability insurance policy.

(5) Insurance coverage; misrepresentation. No grain warehouse keeper may misrepresent any of the following to the department or a depositor:

(a) That the grain warehouse keeper is insured.

(b) The nature, coverage, or material terms of the grain warehouse keeper's insurance policy.

History: 2001 a. 16.