Accurate valuations of assets ensure the correct sums insured, thereby avoiding the risk of underinsurance and co-insurance clause triggering should a loss event occur or, conversely, unnecessary over-insurance costs.

Abattoirs are generally large and complex operations with multiple stages of meat processing and comprising specialised buildings and equipment. Consequently the capital cost to build an abattoir is substantial due to the complexity and scale of the operations involved.

Given these high capital costs, protecting the investment through effective risk management strategies is crucial, and regular periodic valuations ensure that sums insured are kept up to date and the business is properly covered for loss. 

Abattoirs are insured under Industrial Special Risk (ISR) insurance policies. ISR policies are commonly issued on what is referred to as a ‘Mark IV’ wording. This is an Australian industry standard level of coverage.

Under an ISR policy, a Declared Value is needed for each location, normally with a reinstatement basis of settlement.  ISR Mark IV policy wording defines reinstatement as:

“Where property is lost, or destroyed, in the case of a building, the rebuilding thereof, or in the case of property other than a building, the replacement thereof by similar property in either case in a condition equal to, but not better or more extensive than its condition when new.

Where property is damaged: the repair of the damage and restoration of the damaged portion of the property to a condition substantially the same as, but not better or more extensive than, its condition when new.”

Other considerations are taken into account by Insurers in the event of a loss, such as demolition costs, cost escalations over the policy period, planning and rebuilding periods, total estimated limit of liability and under insurance.  

Australian Valuations is widely regarded as an expert in the valuation of abattoirs by brokers and abattoir owners.