Commercial property owners should check their appraisals and insurance coverage
Inflation drives up the cost of everything from food, gas and basic necessities to spare parts for vehicles and building materials. It was up just over 9% from a year ago, climbing 5% in June alone.
Commercial property insurers are not immune to these impacts, and inflation has been a key factor in the high costs many are experiencing. Other stressors include major catastrophic weather events, supply chain disruptions, labor issues, and increased replacement costs for damaged buildings and equipment.
It is more important than ever for businesses and organizations to understand the risks to their business assets and ensure they are properly assessed in the event of a claim.
In the latest Insurance Speak podcast, Charles Greer, vice president and head of large properties at QBE North America, provides context for these issues, highlights factors risk managers need to consider, and explains how inflation affects valuations.
Greer shares that rising material costs are a big driver, and goods such as lumber and drywall are in short supply. “We are seeing rising prices and supply chain issues, as well as extended repair times. Labor availability is also a factor, as contractors cannot find the labor needed to complete repairs.
Commercial property owners may overlook the impact of inflation on the value of their properties and find themselves underinsured in the event of a claim. “Landlords need to have proper valuations to begin with, and with inflation it’s even more crucial for people to have proper valuations,” he advises.
He also recommends that companies have contingency plans for equipment and machinery breakdowns, as additional parts may not be available and that they extend their marine coverage of the building due to possible claims arising from problems. of supply chain.
For more information on the factors risk managers need to watch out for and how they can ensure they have sufficient coverage, listen to the podcast above or subscribe to Insurance Speak on SpotifyApple Music or Libsyne.