Selling Price Clause Law and Legal Definition

Selling price clause refers to a property insurance coverage that is available to businesses that pays the established market (sales) value of products that are damaged rather than simply their lower (production) cost. The space created between ‘actual cash value’ which provides coverage only for the cost to the insured, and ‘business interruption insurance’ is filled by this clause. This helps the manufacturers by covering the cost of all finished goods. However, in the case of mercantile firms, this clause applies only to goods that have been sold but are not yet delivered.