COVID-19 has brought soaring demand and prices to the lumber industry, as people nationwide have begun renovating their homes or building new ones during the pandemic. According to MarketWatch, both lumber futures and lumber demand have doubled since the beginning of the pandemic.
This boost in demand can lead to growth for businesses in the wood niche, as businesses can sell at higher prices than before, but there have been some challenges. Many lumber and building materials dealers have found themselves low on inventory and restocking at higher prices.
Lumber businesses face a number of threats to their inventory, including natural disasters, accidents, fires and theft. As prices and inventory values continue to rise, now is an ideal time to reach out to your clients to help them revise their insurance policy to properly account for any changes to their inventory.
Brokers can recommend several strategies to deal with these rising prices, including to reassess coverage limits to match their clients’ higher-valued inventory. Another solution brokers can offer to customers is reporting changes in stock to PLM. Stock reporting will help both the broker and their customer keep track of changing inventory values in an efficient manner. PLM offers a monthly stock reporting form, designed to keep us and our policyholders aware of any changes to their inventory value. Brokers can utilize this risk management tool to provide their clients with a means of tracking their current inventory and its values so any revisions can be made as soon as needed.
Lumber prices and demand continue to rise, which has led to increased business for material dealers and a corresponding increase in inventory risk exposure. Brokers should take the time now to reach out to their customers and confirm their inventory is properly valued and covered against potential losses.
For more information, contact a representative at PLM directly at https://www.plmins.com/ or call 1-800-752-1895. More details on loss control are also available on our Website at https://www.plmins.com/additional-resources/.