Insuring Against Inflation and Supply Chain Issues
by FCIS Team | This article was posted on 06 10, 2022 |
Inflation and supply chain issues are the talk of the town right now. In one way or another, every business has been affected by one or the other, or more likely, both.
Costs have increased for everything from vehicles and equipment to construction. Supply shortages are contributing to rising costs, leaving many facing the risk of either not having adequate supplies or investing more than they can afford to stock up on items they may never actually use.
With so many day-to-day challenges to manage, it can be easy to forget to consider how insurance factors into the equation.
When it comes to property in particular, carriers are demanding that valuations be increased, and some are asking those they insure to show how the value has changed over time. With this in mind, carefully addressing the current cost of construction, sold assets and beyond is essential to ensure a fair valuation and policy.
Consider getting a qualified provider like FCIS to assist you in performing a thorough property valuation to get a better understanding of your anticipated replacement costs and determine the level of coverage you need.
The reality is, historic inflationary coverage is not sufficient to keep up with the current inflation rate. Now is the time to ask yourself if your limits are still adequate and take proactive measures to ensure you have the coverage you need.
It is also a good idea to review your business continuity plans and make updates as needed. Conduct stress tests to evaluate how supply chain issues will impact your organization.
You may also want to consider increasing business income and extra expense coverage periods to compensate for longer timelines on replacing and repairing items.
Ultimately, the goal is to anticipate changes in your business that may result from inflation and supply chain issues and, based on your planned adaptations, make sure there are no gaps in your coverage.
Sound like a lot of work? It is. But you don’t have to do it alone. We’re here to help you understand your insurance needs and get the proper coverage. Just give us a ring!