Valuation in Commercial Insurance
Valuation of a business’s property is one of the most critical steps when crafting a commercial insurance policy.
Commercial insurance protects business owners from costs associated with a loss. One of the most common types of losses is when a company’s property is damaged. The property valuation must be spot on to fully protect a business from repair or replacement costs.
Risk of Improper Valuation
An improper valuation of property puts businesses at risk. Periods of high inflation, infrequent policy updates, and rapid change in the size of an organization can lead to improper valuation.
Improper valuation could mean your property’s value is over-estimated. In this case, you may pay higher premiums than necessary due to the inflated values. On the other hand, underestimated property values can create unexpected costs in the event of a loss.
For example, if your policy insures a $5,000 piece of equipment, but its actual value is double that, you will not have enough coverage if the equipment is damaged or destroyed. This scenario leaves the business owner responsible for covering the difference between what insurance will pay for a replacement and the true cost of new equipment.
Keeping Your Policy Up-to-Date
Regularly updating your commercial insurance policy and keeping property values current is essential. Please contact Steve Longenecker (303-808-9351, x2) at Mountain Insurance: Longmont to discuss your business insurance coverage options in Longmont, CO, and our neighboring communities.
We give out $25 gift cards for referrals that become our insurance clients.
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