If you are stockpiling items in high demand and short supply, such as fence and decking timber, make sure you are insured. Ben Rickard from BuiltIn gives the lowdown
You may have read about and even experienced the problems with goods getting into the country at the moment. This is partly due to Covid-related delays to shipping and backlogs at ports. Covid lockdowns and the same issues with logistics have had a flow on effect upstream as well, with production inputs and raw materials running low. Some relevant examples include white paint and the chemicals that go into wood stain and timber treatment, causing those items to run short here in New Zealand.
Some of you may be tempted, as a number of our clients have been, to stock up when you can on these materials. That way, if merchants run out, at least you have some on hand and you can get by. The value of this stock on hand can soon mount up, so you need to make sure it is covered by your insurance. Building materials are exposed to the usual risks of water damage, fire etc. And, because they are in short supply, with prices rising every other week, they are an increasingly attractive target for thieves too.
Your best bet is to make sure your stock is covered under a material damage policy. You may already have one that covers your tools and equipment, and stock can generally be added under this too. This is likely to be an ‘anywhere in New Zealand’ policy, so the stock is insured if stored at your yard, in your garage, in your vehicle (although this could be restricted in some cases) or on site. Be sure to increase your ‘sum insured’ by the value of the stock you’re carrying.
If you own premises (eg, a building or yard), the insurance on
that building could be changed to include stock as well. Check the stock sum insured on your current cover and make sure you increase it if needed. Depending on the wording of your policy, the stock may only be insured at a specific address. If it might be transported or stored elsewhere, you will need to amend your cover to reflect this.
A recent customer win!
Just prior to Christmas a landscaping and lawn mowing contractor client of ours had an expensive mower stolen. With the replacement item in short supply and our client needing to get back on the job, we helped to reassure the supplier that payment would be made, so he would release the mower in advance of payment. The claim was settled within 10 days, with the insurer paying over $47,000.
This article is not exhaustive and you should conduct your own assessment of your specific needs, perhaps along with an insurance/risk management professional adviser. There are other policies to cover different risks. Individual policy wordings from different insurers may vary. You should refer to the specific exclusions in your own policy wordings and discuss them with your insurance adviser if you are unsure.
Builtin are New Zealand’s Trade Insurance Experts. For more information visit builtininsurance.co.nz, email Ben Rickard at ben@builtin.co.nz or call him on 0800 BUILTIN