Why stock concentration can affect underwriting

High values stored at one location can create a significant maximum foreseeable loss. Insurers may also consider building construction, racking height, fire protection, storage layout, product type, theft exposure and catastrophe risk.

Insurance commonly considered

Depending on the business, cover may include property damage, stock, business interruption, machinery, transit, theft and liability.

Declared values need careful attention

Stock can fluctuate through the year and may be concentrated around seasonal or promotional periods. Insurers may request maximum as well as average values and may apply specific limits or conditions.

Business interruption and supply chain

Warehousing risks can create dependencies on key premises, logistics providers and suppliers. Business interruption exposure should be considered with the property placement and the expected time required to recover from a major loss.