[Code of Federal Regulations]
[Title 7, Volume 7]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR735.23]

[Page 224-225]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 735--COTTON WAREHOUSES--Table of Contents
 
Sec. 735.23  Insurance; requirements.

    (a) When requested in writing by the depositor of cotton in a 
licensed warehouse, or by the holder of the receipt covering such 
cotton, to insure such cotton against loss or damage by fire, lightning, 
and other risks, each licensed warehouseman shall secure in his own name 
such insurance under reporting forms of policies which automatically 
attach for the full value of such cotton, including daily changes of 
value through market fluctuations and changes in the quantity of such 
product from day to day, as soon as such cotton is placed in his legal 
custody, and he shall continue such insurance in effect so long as the 
cotton remains in his legal custody. Such insurance shall be covered by 
lawful policies issued by one or more insurance companies. Each 
warehouseman insuring cotton under the provisions of this section shall 
submit such reports to underwriters as may be required under the terms 
of such policies, and copies of such reports shall be submitted to the 
Department as it may require. If the warehouseman is unable to procure 
insurance to the extent requested, he shall, orally or by telegraph or 
by telephone, and at his own expense, immediately notify the person 
making the request of such fact. When insurance is not carried in the 
warehouseman's name, the receipt shall show that the cotton is not 
insured by the warehouseman.

[[Page 225]]

Nothing in this section shall be construed to prevent a licensed 
warehouseman from adopting a rule that he will insure all cotton stored 
in his warehouse, but if he elects to insure he shall accomplish such 
insurance through policies as above specified.
    (b) Each warehouseman shall keep exposed conspicuously in the place 
prescribed by Sec. 735.6, and at such other place as the Administrator 
or his representative may from time to time designate, a notice, stating 
briefly the conditions under which the cotton will be insured against 
loss or damage by fire, lightning, and other risks.