• Home
  • About
  • Products & Services
  • Claims
  • Producers
  • Loss Control Center
  • Request A Quote
  • Green Tree Risk Partners
  • HardwareXpress
  • Portable Sawmill Protection
  • Blog
  • Careers
  • Newsroom
  • Events
  • Contact Us
  • Make a Payment
  • Producer Portal
  • Request a Quote
  • Green Tree Risk Partners
  • Contact Us
  • 1.800.752.1895
Pennsylvania Lumbermens Mutual Insurance Company for wood products industry
MENUMENU
  • About
        • About Pennsylvania Lumbermens Mutual

        • Pennsylvania Lumbermens Mutual Insurance Company
          • About
          • Why PLM?
          • History
          • Timeline
          • Leadership
          • Newsroom
          • Financials
          • Events
          • Careers
          • Quick Links

          • A Culture of Caring
          • Newsletters
            • Subscribe
            • Lumber Memo Archive
            • Producer Update Archive
  • Products & Services
        • Products & Services

        • Specialized Property & Casualty Insurance for the Woodworking and Building Material Industries
          • Products Overview
          • Who We Protect
          • Coverages
          • Business Development Representatives
          • Payment Options
          • Dividends
          • Request a Quote
          • Workers' Compensation Placement

          • Green Tree Risk Partners
          • Hardware Store Insurance Solution

          • HardwareXpress
          • Portable Sawmill Insurance Solution

          • Portable Sawmill
          • Quick Links

          • Locate a Business Development Representative
          • Stock Reporting Form
          • Interactive Protection Map
  • Claims
  • Producers
        • Insurance Producers & Brokers

        • Lumber
          • Producers
          • Producer Kit
          • Interactive Protection Map
          • Commission ACH Payments
          • Producer Portal
          • Wholesale Brokerage / Workers' Compensation Placement / Logging Program

          • Green Tree Risk Partners
  • Loss Control Center
        • Loss Control Center

        • Reduce insurance risk in the wood products and lumber industry
          • Loss Control Center

          • Loss Control Center Home
          • Loss Control Guides

          • Operations
          • Auto / Fleet
          • Fire
          • Machinery
          • Risk Management Resources

          • Safety Training Videos
          • Distracted Driving - Phone
          • Continuous MVR Monitoring
          • Portable Alert System
          • Telematics
          • Combustible Dust Solutions
          • Safety Materials
          • Additional Safety Resources
          • Protective Devices
          • Quick Links

          • Locate a Loss Control Representative
  • News
You are here: Home / Producer Update / Dovetail: Inflation and Property Values – Is Your Business Adequately Protected? 

Dovetail: Inflation and Property Values – Is Your Business Adequately Protected? 

November 10, 2023 by PLM

The Dovetail Header
  • Share
  • Tweet
  • LinkedIn

Most lumber business owners already understand the many ways that inflation has impacted their companies. In their world, it is no secret that prices for building materials and labor have risen on average by about 36% over the last three years alone, according to the U.S. Bureau of Labor Statistics Producer Price Index (PPI). But these price increases don’t just affect the cost of inventory and the product prices that companies charge their customers. They also impact the amount lumber operators will have to pay to rebuild their businesses in the event of wind, hail, or fire damage. That’s why it’s imperative for business owners to update their property values and avoid a potential case of sticker shock after filing a claim. 

This combination of market and weather forces makes it imperative for lumber operators to obtain the most accurate and current valuations of their inventory and businesses.  

To ensure your client’s business is adequately protected, consider these best practices:  

First, be proactive. Encourage your clients to reach out and provide them with details about their property and their inventory, including any recent changes such as inventory surges, new buildings, or significant capital improvements. Then, provide them with a Statement of Values that you can both sign off on. 

Next, encourage them to review their inventory limits. Make sure their policy covers the cost of inventory replacement and pay particular attention to commodities they store that have undergone the greatest amount of price volatility. Also make sure to consider their building contents and equipment costs. While inflation has been the biggest driver of property values over the past three years, ongoing supply chain complexities are another complicating factor. This impacts rebuilding costs and lengthens the potential restoration period for their business. As you review your policies with your client, be sure that their equipment limits will still cover them in the event of a loss. Also, evaluate their business interruption coverage and ensure it reflects today’s realities. 

The basic equation insurers use to develop your premium is rate multiplied by exposure. As values (exposures) increase, premiums increase commensurately. The more steps you can take to reduce risk, the more likely you will be to mitigate rate increases, which are happening across the industry as well. Working alarms and sprinkler systems, updated roofs, new wiring, and other infrastructure improvements are proven risk mitigation steps.  

While inflation is an unfortunate new reality, it shouldn’t create vulnerabilities for your client’s business. By collaborating with your insurer and right-sizing their property values, you will gain peace of mind knowing that your clients are covered in the event of a loss. 

Producer Update: Issue 5 – 2023

IN THIS ISSUE:

  • President’s Commentary
  • Cyber Corner: Don’t Get Scammed this Holiday Season
  • Plumb Safety: Preparing for Tornadoes, Wind, and Hail
  • Fall Protection in the Workplace
  • Dovetail: Inflation and Property Values – Is Your Business Adequately Protected?
  • Spotlight On: PLM Earns Several Major Insurance Awards
  • Spotlight On: United Way Campaign – A Look at Our 2023 United Way Campaign
  • Spotlight On: 3.5% Dividend for NEMEON
  • Recent Wins

PREVIOUS:

Fall Protection in the Workplace

NEXT:

Spotlight on: PLM Earns Several Major Insurance Awards

Filed Under: Producer Update

Pennsylvania Lumbermens Mutual Insurance Company
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103

Toll Free: 1.800.752.1895
Fax: 215.625.9097
CustServ@plmins.com

              
  • About
  • Products & Services
  • Claims
  • Producers
  • Loss Control Center
  • Blog
  • Careers
  • Newsroom
  • Contact Us
PLM wood products insurance logo
Subscribe to our newsletter
  • Legal
  • Terms and Conditions
  • Privacy Policy
  • Accessibility Statement
  • Sitemap
© PLM. All Rights Reserved.