An increase in construction spending, a lumber shortage, wildfires, hurricanes, and tariffs on Canada’s softwood lumber industry have caused lumber prices to soar. The Chicago Mercantile Exchange had lumber futures at a record $532.60 per 1,000 boards in March, according to The Wall Street Journal.
Unfortunately, this news means the building material dealers, lumber yards, and wood-related manufacturers we insure here at Pennsylvania Lumbermens Mutual Insurance Company are paying more for their inventories. While they will likely make it up in sales, these business owners need to make sure they are properly insured for their now-pricier inventories. Coverage is based on the value of goods – a value that can change, and in this case, has changed, with the economy.
If lumber on store shelves was ravaged by fire before it was purchased, the business owner may not have adequate insurance to cover the higher value paid for the lumber. For this reason and many others, it’s important that business owners stay in touch with their insurers to ensure their coverage limits are appropriate. With the cyclical nature of inventories, a coverage limit can quickly become deficient if an insurer is not updated on changes. In other words, if a fire burned down a lumber yard, the lumber yard owner might get the claims check he was expecting, but that amount may no longer cover the value of the inventory lost in the blaze.
Business insurance for the wood industry covers everything from buildings, to business interruption, lost income, and theft as well as lost inventory. For customers to get the most out of these coverages, they should keep PLM apprised of changes within the business.
PLM insureds can stay up-to-date on inventory by completing our stock reporting form regularly. Here, business owners can report on furniture, machinery, equipment, and any changes to inventory values. As the industry gears up for what The Wall Street Journal is calling “one of the busiest construction seasons in years,” it will be particularly important for customers to ensure their shops are in order and their inventory properly accounted.
Working with PLM, we will help you meet the needs of your wood industry customers. Help us stay in the loop regarding changing inventories, building and equipment improvements, and we can help ensure your customers are covered to succeed for years to come.
