In the last couple of years, construction and inventory costs have risen significantly. Labor and material costs along with supply chain issues are some of the reasons for the drastic increase. If you haven’t reviewed your building and contents insurance recently, you are most likely underinsured.
Below are some important areas to review.
The amount of insurance should represent the construction cost of your building, not the real estate or tax value. Most commercial buildings in our area cost $250-300 per square foot.
The cost of inventory has increased significantly as well. In addition, many companies have over stocked due to the length of time to get materials. Make sure your contents limit reflects the increased values.
Business Income (Loss of Income)
If you have a loss, the length of time to repair or replace your building could be longer than expected. Permitting, material delays and availability of contractors are all factors that could delay construction. Make sure you have coverage to replace any lost income during this time.
This is an ugly condition in almost every commercial policy. Simply put, if you do not have enough insurance coverage, you will be penalized at the time of a loss. Depending on how underinsured you are, the penalty can be significant.
The time to review your property coverages are now, before you have a loss. Contact us today and we will be happy to review with you.