Industrial Valuation Services

Where demolition and debris removal is concerned with buildings, a valuer would normally make an allowance for this in his calculations and might factor in anything from 1.5% up to 7% of the base replacement cost, depending on the type and complexity of the building, the location, ease of access and the like.

The plant however, in the old days assumed that the scrap value recovery in the plant would be sufficient to cover its removal without any additional amount factored in.

These days though, even with high scrap values and demand, there is a hidden fly in the ointment so to speak, that can totally upset matters and that is ‘asbestos’.

It may not be in the fabric of the building but may be in lagging on the process pipework or boilers or economisers and can add millions to the debris removal process and negating the value of the scrap plant.

The additional costs include special licence to handle, special containment, special dump permits and the list goes on. This may lead on to or exagerate the final outcome of a material damage loss claim and the prospect of under insurance and the consequences.

Most countries have a threshould level for under insurance, so if the percieved value at risk is 100 say and you are insured for 85% (say $85) of this - then in a total loss the insurers may pay the full amount insured. If the amount insured is less than this - say 50% ($50), then a penalty or average clause comes into play for being under insured and you end up with half of the sum insured which is $25, not much use really.

It is worth noting that values at risk are normally established on the date of the loss and the 85%  threashold gives a bit of leeway for inflation or rising costs during the insurance year but below it is a waiting disaster that you have paid for along the way.