Almost everything is getting more expensive. Supply chain issues, increased demand, workforce shortages and other issues are driving up inflation at a sharp clip. Every industry is affected.

And while an uptick in prices might be a boost to one’s top line profits, the increased cost of doing business is hurting the bottom line. Insurance is not immune to inflationary pressures, and most insurance and reinsurance companies continue to look warily at the cost of materials, the time it takes to replace or rebuild property, legal expenses and other factors as they review their books of business. It appears that U.S. businesses have a large (and self-inflicted) underinsurance headache.

Think about your own operations. How much money would you need to replace a string of damaged or destroyed barges or to repair or replace systems or deck machinery on a tug? How about the cost to build a new ferry or to purchase replacement containers, reefer points or gensets? Is the insurance limit you have in place going to cut it?

Also, materials and labor shortages, and transportation and logistics problems, have lengthened the time needed to repair or replace damaged property. Under these conditions, it might take two to three times as long to rebuild and reequip a facility or vessel than it took before the pandemic.

Think about your key assets. How quickly can you get the replacement part or unit from the factory to your facility? How congested is the shipyard orderbook? Do you have the relationships that could help you bump your project to the top of the list, or do you have to resign yourself to waiting in line? And at the end of the day, have you factored that into your business income insurance limit?

With all of this in mind, if you aren’t talking to your insurance agent about the increase in construction and materials costs and longer time horizons on projects, you could find yourself underinsured. The point of your policy is to protect your assets and make you whole in the event of a loss.

Proper valuations of the cost to replace or rebuild your assets (including your lost income resulting from a loss) are at the core of making sure your insurance is working for you.

Dan Bookham is a vice president with Allen Insurance & Financial. He specializes in longshore, offshore and shipyard risk. He can be reached at 1-800-236-4311 or [email protected].