A recent resource document created by Travelers details how the rising costs of building materials may lead to the crippling underinsurance of commercial businesses. In fact, the resource indicates that “an estimated 75 percent of commercial business are underinsured by an average of 40 percent or more.” In the event of a natural disaster, building fire or other major loss event, underinsured businesses may be unable to recover from the financial hardship.
The steady price climb of building materials stems from a number of trends including increased competition in the global marketplace as a result of the rapid development of nations such as China and India. From 2016 to 2017, the cost of plywood and cement increased nearly 5 percent each while copper wire, diesel fuel and asphalt all jumped between 25 and 30 percent.
To ensure your commercial business has the appropriate level of coverage should a major loss occur, you should continually evaluate and update your property values to ensure consistency with the current pricing trends of essential building materials.
Click Here to access the full document from Travelers. To learn more about keeping your insurance values up to date, please contact me directly at firstname.lastname@example.org or at 410.339.5215.