If an insured does not wish to insure the full value of their stock for theft, what policy do they most likely need?

When an insured chooses not to insure the full value of their stock for theft, a first loss policy is the most suitable option. This type of policy allows the insured to cover a specific amount that is less than the full value of the stock. Essentially, it provides coverage for an agreed amount, ensuring that the insured can claim up to that limit without the need to prove the actual value of the loss, which can simplify the claims process.

A first loss policy is particularly attractive for businesses that may anticipate smaller losses or who prefer to retain some risk rather than covering all potential losses. Often, businesses may find it more economical to insure only a portion of their inventory, reflecting their assessment of risk and potential loss scenarios.

The other options represent different insurance mechanisms that do not align with the specific needs of someone wanting limited coverage for their stock. For example, a new for old policy covers the replacement of items with new ones without considering depreciation, an agreed value policy sets a value for specific items but does not address part coverage, and a fixed value policy is designed for covering items at a set value, which may not cater to situations where the insured only desires to cover a reduced value.