In every issue of our Business Insurance Report we have a special feature called “Claims Corner” that looks at different claim issues. In our upcoming newsletter, we talk about how to value old and obsolete equipment. This is important because investing some time at the front end will ensure you get the paid what you think is fair value for your equipment.

Our Director of Commercial Insurance, Keith Porter, has outlined some of the potential options available to you with respect to the valuation clause relating to equipment:

• Replacement Cost- replacement with “new” equipment of like, kind & quality.
• Functional Replacement Cost– replacement with “new” comparable equipment that will function in a similar manner.
• Actual Cash Value- the depreciated value or market value.
• Custom Solution- tailored to meet unique or special needs, such as an agreed value.

Regardless of the option you select, make sure the value is researched, credible and documented. In addition, the insurance policy valuation clause should properly state how that equipment would be valued following a loss. 

To find out more about valuation of equipment, feel free to contact me at greg.barratt@cowangroup.ca.