A lot can change between property insurance renewal cycles, including the insurance market. Fortunately, there are steps manufacturers can take before your insurance renewal period that may make the process of obtaining the appropriate coverages a little simpler.
Evaluating organizational changes is one major consideration that could be included in your renewal preparation. Be sure that applicable updates you’ve made to the business are well-documented for your insurance broker. The following questions may help guide that conversation:
Did you acquire, move or expand operations?
An acquisition is an often overlooked element of expanding operations as the standards of value for an acquisition are not compatible for the values needed by property insurance underwriters. Acquisition accounting considers the fair market value of the assets, while insurance underwriters want to understand the Replacement Cost New (RCN) values of your assets.
Did you make any substantial capital investment/improvements to your buildings or add manufacturing or production equipment?
If there was a building addition to handle expanded plant capacity, both the Real Property and the Business Personal Property totals would be affected by these investments/improvements and need to be considered.
Did you sell, transfer or dispose of business personal property?
Without updating the underlying data and incorporating these changes into your renewal process, you may be paying premium dollars to ghost assets that are no longer on-site or part of the current operations. As an added bonus, this would also impact business personal property taxes in the same way as you will not be paying property taxes for assets not part of the current operations.
Good Property Data Goes a Long Way
The requirements for submissions have changed significantly. If you haven’t done so recently, check with your insurance broker to confirm the information required for a top-notch submission. The more complete and organized this data is, the more your submission can really pay dividends. If you experience significant property modifications or it has been more than five years since you’ve updated your property insurance data, consider completing an appraisal in conjunction with your insurance renewal. An insurance appraisal provider, such as the CBIZ Valuation team can help organize, collect and verify the pertinent appraisal and underwriting data you need to help your broker secure the best coverage terms for the lowest cost.
For more information, contact a member of our team.
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