The disturbances of 2020 and beyond suggest it is a good time for members to review their business assets as
1. Currency fluctuations or increased overseas costs can mean a higher value in sterling for imported goods and hence on resale values.
2. Supply chain tests can lead to the need for increased stockpiling of essential goods in warehouses due to hard borders and high tariffs.
3. Removal of office furniture, phones, and IT equipment to assist working from home can reduce the concentration of inventory at head office.
All these effects can have a major bearing on the accuracy of sums insured to meet latest real values at risk. Furthermore the distribution of company property to other locations can result in less transparency over ‘who has what where’, with loss of control, maintenance, and accountability.
So dig out your asset register, better still review the spreadsheet, or best of all keep it online where buying, disposing and relocating can be managed and shared efficiently. Each record should be identifiable by a unique reference, preferably a barcode number. Determine the replacement cost of all items and calculate the maximum value in any one location against the current sum insured in the Contents section of your insurance policy. Call your broker or company to revise requirements.
This exercise is recommended from time to time anyway as with the exception of IT, replacement costs of most items have been rising over many years leading to the significant incidence of under insurance, compromising the settlement of future claims for physical losses and business interruption for less than full value.
If finding out the latest position is impractical or time consuming at present, there are services within the GDB membership who will tag, value and update the inventory for you.
Author: Stephen Laing, Managing Director @ ASSETtrac Ltd
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.
Date Published: 20 November 2020