Commercial Property Values Just a Click Away
Building Valuation System Can Help Determine Insurance Limits
WARREN, NJ, March 21, 2007 - Commercial building owners often underinsure their properties because they base insurance limits on market values or they
do not account for rising labor costs or the cost to replace critical equipment.
In response, the Chubb Group of Insurance Companies is offering agents and brokers an online application that will make it
easier to determine insurance limits for commercial properties. The application, Building Valuation System (BVS), is available
through @chubb, Chubb's secure Internet site for agents and brokers.
Developed by MSB (Marshall & Swift / Boeckh), a leading supplier of building cost data and valuation tools, BVS offers an
objective and consistent approach to establishing building values for existing and prospective insureds. It provides construction
costs, which are updated quarterly, and accounts for regional deviations in pricing. It can also account for the cost of complying
with building codes. The system includes typical defaults for buildings of different sizes, which can reduce the data input
required, saving agents and brokers time.
"Accurate building valuation is fundamental to developing a property insurance program that includes limits of insurance reflective
of the insured's true exposure-the costs to repair or replace lost or damaged covered property," said Bill Puleo, vice president
of Chubb & Son and worldwide monoline property manager for Chubb Commercial Insurance. "This online tool makes it easier for
agents and brokers to help their commercial clients make sure they have adequate protection for property losses."
Building owners often underestimate the cost of replacing their property and equipment. In some cases, they have purchased
insurance based on a building's market value, when the rebuilding cost may be substantially higher. Owners also may not have
factored in escalations in the cost of construction materials and labor, especially following a catastrophe such as a hurricane.
In addition, few consider demolition costs. The gap may grow even larger if the higher cost of complying with current building
codes was not considered. In recent years, a global construction boom, natural disasters and oil prices have sharply pushed
up the cost of raw materials. For example, the cost of copper pipe has more than doubled in 2006, and structural steel prices
are up 14 percent, according to MSB.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's
global network includes branches and affiliates in North America, Europe, Latin America, Asia and Australia. Additional information
on Chubb can be found at www.chubb.com.
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