The Dovetail: Issues to Watch in 2023

By John Kennealy, Vice President of Claims

As we start this new year, there are several issues to consider that could have an impact on your business. Risk factors for the lumber and wood industries are constantly changing especially in an ever-evolving world. Here are some areas to watch out for that are sure to bring new challenges to businesses in 2023.

While not new per se, fire, wind, hail, and collapse will always be a loss factor. In addition to these perils, PLM and the rest of the insurance industry are beginning to see new trends in the area of extreme cold snaps. Twice now, first in February 2021 and late December 2022, southern states were hit with severe cold that led to a spate of frozen pipe and water damage claims. Staying vigilant about recommended loss control measures aimed at better weather proofing your businesses is the best way we know to ward off such claims. Wrapping exposed pipes, letting faucets drip, and properly heating buildings are just a few ways to reduce your exposure to these types of losses.

Another thing to consider with the usual loss perils noted above, is to make sure to talk to your representative at PLM or your insurance provider about whether equipment breakdown coverage is right for you. Supplementing the commercial property coverage form, equipment breakdown coverage will address pressurized boiler explosions, electrical breakdown, and mechanical breakdown otherwise excluded under the property policy.

Another area to watch is cybersecurity. It is imperative that you are protecting your business from sophisticated scams and cyber risks. For example, there is no coverage under the property policy when an insured is tricked into voluntarily surrendering property to a thief. Be extra careful to protect your point-of-sale system through physical inspections and software updates. If you don’t have a cyberattack prevention plan, get one! Lastly, make sure your employees understand the threats and are trained to recognize them. Talk to your PLM representative about cyber coverage that would address select data breaches.

Another key area in 2023 will be business interruption insurance which covers the reduction in business income when operations are interrupted by a covered peril. Making sure you follow the process by which estimated maximum loss of business income is calculated is crucial to determining the insurance required and avoiding coinsurance penalties. Carefully considering peak periods and movement in sales volume are especially important in getting this calculation correct.

A lot will come at you and your business throughout this new year. Make sure your business is as protected as it can be by working ever more closely with your insurance partners at PLM.