On August 1, 2025, a new 15% tariff on industrial machinery and equipment imported from the Eurozone will take effect in the United States. While trade disputes and tariffs are nothing new, this move is set to have an immediate and significant impact on insured property values – especially for industries that depend on high-value, specialized equipment sourced from Europe.
For facility owners, insurers, and brokers alike, the concern is clear: many insured assets – particularly machinery – will now be under-insured unless values are promptly reassessed to reflect these sudden cost increases.
European Equipment: A Backbone Across Industries
The Eurozone is a dominant supplier of highly specialized machinery across a broad range of sectors in the U.S. market. This includes:
- Packaging equipment from Germany, Italy, and Spain – used extensively in food, beverage, consumer goods, and industrial sectors.
- Diagnostic imaging and medical systems, such as MRI and CT scanners, manufactured by companies like Siemens (Germany) and Philips (Netherlands).
- Pharmaceutical manufacturing equipment, including tablet presses, blister packaging systems, sterile filling lines, and bioprocessing equipment – much of which originates from Italy, Germany, and Austria.
These machines are not only expensive to purchase but often require custom configurations, specialized installation, and long lead times – all of which are now affected by this 15% tariff.
Replacement Cost Just Went Up – But Insured Values Haven’t
Insurance coverage for fixed assets is typically based on Replacement Cost New (RCN) – the cost to replace an item with a new one of similar kind and quality under current market conditions. With the introduction of the 15% tariff, the RCN for Eurozone-origin equipment has instantly increased, regardless of when it was originally purchased.
Here’s where the risk lies: unless insured values are updated, businesses are now at risk of being under-insured by at least 15% on a wide range of equipment categories.
Take, for example, a pharmaceutical facility with $10 million in packaging and sterile processing equipment sourced from Europe. With the new tariff in effect, replacing that same equipment will now cost $11.5 million – but unless the insurance values are updated, the facility is only covered for the original $10 million. That $1.5 million gap may become the owner’s responsibility in the event of a loss.
Industries at Particular Risk
While the tariff applies broadly to industrial equipment, certain sectors are more exposed than others due to their dependency on Eurozone manufacturers:
- Healthcare providers and diagnostic labs with imaging systems and lab automation tools from Europe
- Pharmaceutical producers with highly regulated, validated equipment sourced internationally
- Food, beverage, and consumer goods companies relying on Eurozone-origin packaging lines and robotics
- Specialty manufacturing sectors where domestic alternatives are limited or nonexistent
For these businesses, the risk of outdated insurance values is both real and immediate.
What Organizations Should Do Now
To avoid being caught under-insured, companies should:
- Review asset registers and insured values, with a focus on high-value imported machinery
- Identify equipment sourced from Eurozone suppliers, especially in regulated or highly specialized environments
- Engage a qualified insurance appraisal firm to update replacement costs, with consideration to the new tariffs, supply chain changes, and inflationary pressures
Why Work with Suncorp Valuations
At Suncorp Valuations, we provide expert insurance appraisal services tailored to a wide range of industries – from manufacturing and healthcare to logistics and pharmaceuticals. Our professionals have deep experience appraising globally sourced machinery, and we actively monitor how trade policy, tariffs, and market volatility affect insurable values. With over 60 years of valuation expertise and a global client base, Suncorp is ideally positioned to help organizations accurately assess replacement costs and ensure their insurance coverage remains aligned with today’s evolving cost realities.
In many Indigenous communities across Northern Canada, infrastructure is vital not just for daily life, but for long-term sustainability, health, and economic development. From schools and community centers to water treatment plants, fire halls, and public works buildings – these assets represent critical investments. And yet, many remain underinsured or inaccurately valued, leaving communities vulnerable in the event of damage or catastrophic loss.
Properly insuring these properties starts with one essential element: accurate, reliable replacement cost appraisals. Unfortunately, this is often easier said than done – especially in remote or hard-to-access communities.
The Unique Challenges of Remote Infrastructure Valuation
Unlike urban or suburban settings, northern Indigenous communities face a range of logistical and economic challenges that impact construction costs and asset values:
- Transportation Costs: Delivering building materials, machinery, and even basic supplies to remote areas often involve air, barge, or ice road transport – all of which add significant cost premiums.
- Short Construction Seasons: In much of the North, the window for major construction projects is limited to a few short months each year due to weather and ground conditions.
- Labour Constraints: Skilled labour shortages in remote areas can lead to increased contractor costs and longer build times, both of which drive up replacement costs.
- Custom-Built Solutions: Many facilities – particularly water and wastewater infrastructure – are designed with community-specific requirements, making “off-the-shelf” replacement estimates inaccurate.
Using generic benchmarks or regional averages for insurance values in these contexts can significantly understate true replacement costs, resulting in underinsurance that becomes painfully apparent after a loss event.
Why Accurate Appraisals Matter
For municipalities, First Nations, and insurance program administrators, undervaluing infrastructure can have serious consequences:
- Claim settlements may fall short, forcing communities to cover the funding gap or delay rebuilding.
- Premium allocations may be skewed, affecting equity in shared insurance pools or self-insured arrangements.
- Capital planning becomes more difficult, as outdated asset data does not reflect current replacement realities.
In contrast, a well-supported insurance appraisal provides not only a replacement cost estimate but a deeper understanding of each asset’s characteristics, condition, and risk profile – supporting better decision-making and financial planning.
How a Qualified Valuation Firm Can Help
At our firm, we specialize in appraising tangible assets for insurance and financial reporting purposes, with deep experience working in Canada’s northern and remote communities. Our services include:
- On-site inspections to verify asset condition, features, and current use.
- Detailed analysis of local cost factors, including remote construction logistics, labour availability, and seasonal considerations.
- Valuation of a wide range of assets, from community buildings and public works facilities to water and waste treatment infrastructure and heavy municipal equipment.
- Clear, defensible reports that meet the needs of insurers, auditors, and funding agencies.
We don’t rely on cookie-cutter models or unverified asset registers. Instead, we develop customized valuations based on real-world replacement scenarios – considering location-specific costs, regional contractor data, and current material pricing trends.
A Path Toward Resilience and Equity
Ensuring that Indigenous communities have access to accurate, high-quality insurance valuations is not just a technical issue – it’s a matter of resilience, equity, and long-term planning. Communities should never be forced to rebuild with inadequate resources simply because their insurance coverage was based on flawed data.
With the right expertise and a commitment to precision, valuation firms can play a crucial role in helping communities protect what matters most.
The global business environment is increasingly defined by volatility. Supply chains remain strained, raw material prices fluctuate, and tariff regimes shift with little warning, particularly between major trade partners like Canada and the United States. In this climate of uncertainty, valuation risk is emerging as a serious blind spot for many companies.
When costs are unstable and economic signals are mixed, business owners and CFOs often hesitate to make key investment or insurance decisions. But paradoxically, this is precisely the time when current, professionally supported asset valuations are most critical.
What Is Valuation Risk and Why Does It Matter Now?
Valuation risk is the exposure a business faces when the assumed value of its assets does not reflect reality. This could stem from:
- Outdated replacement cost data on insured assets
- Inaccurate book values of fixed assets used for financial or tax reporting
- Assumptions that no longer reflect market conditions, especially in the face of changing tariffs, materials shortages, and transportation bottlenecks
The result? Businesses may find themselves underinsured, overexposed to loss, or making decisions based on faulty asset values – undermining both financial reporting and strategic planning.
Tariff Volatility and Its Impact on Asset Values
Tariffs have become a powerful disruptor. When duties are imposed or lifted on construction materials, machinery, electronics, or raw materials, the cost to replace or acquire assets can change virtually overnight. This is particularly challenging for companies with international operations or cross-border supply chains.
These changes directly affect:
- Replacement cost values for insurance purposes
- Capital budgeting and investment planning
- Fair market value assessments in M&A or lending contexts
Without updated valuations that factor in current tariff structures and supply disruptions, businesses risk significant financial misstatements or gaps in coverage.
Why Updated Valuations Enable Better Decisions
In today’s climate, relying on historic cost data or internal accounting estimates is no longer sufficient. A professionally prepared valuation:
- Reflects current material, labour, and transport costs
- Accounts for location-specific challenges and market conditions
- Provides defensible data for insurers, auditors, lenders, and investors
- Transfers liability from internal teams to qualified valuation professionals
This last point is particularly important. When a certified third-party valuation is used, the risk of error and exposure shifts from the business to the valuation provider. For CFOs and asset managers, this not only improves compliance, it adds a layer of risk protection.
What Should Business Leaders Be Asking Right Now?
- When was the last time our major assets were independently appraised?
- Do our insured values reflect today’s replacement costs or yesterday’s?
- Are we relying on book value for decisions that require market value?
- How are tariff changes and supply disruptions affecting our asset base?
- Could a valuation help reduce our exposure or support better decisions?
These questions are not just for year-end audits or insurance renewals – they are strategic and operational. With so many moving parts in the global economy, clarity around asset values is essential for budgeting, financing, risk management, and corporate governance.
How We Can Help
Our firm specializes in both insurance appraisals and market value assessments across North America and internationally. Whether you’re reassessing replacement costs for insured property or establishing Fair Value for financial reporting, we apply real-world data, market-based methodologies, and on-the-ground expertise to ensure your valuations are accurate and defensible.
In a time of unpredictability, sound valuations aren’t a luxury – they’re a necessity. Let us help you move from uncertainty to confidence.
In today’s shifting economic landscape, mergers and acquisitions (M&A) continue to be a strategic tool for growth, diversification, and survival. However, as the uncertainty with tariffs and interest rates volatility continues, and markets cool, buyers and sellers are facing heightened scrutiny around transaction fundamentals, and one critical area where missteps are still far too common is in the valuation of tangible assets.
Whether part of a strategic acquisition or a distressed sale, tangible assets — including land, buildings, machinery, equipment, and specialized infrastructure — often make up a substantial portion of the transaction price. Yet, despite their importance, these assets are frequently undervalued or overvalued due to inadequate or outdated valuation methods.
Beyond the Ledger: Why Relying on Fixed Asset Records Isn’t Enough
Too often, tangible assets values are developed by indexing up original costs using accounting records to estimate current costs and then depreciating these based on the purchase date. While this might seem efficient, this is a risky manner to develop Fair Value, as it overlooks key realities:
- Fixed asset registers may be outdated, incomplete, or inaccurate.
- The cost on the records may be an allocated cost and not an actual original cost.
- Currency exchange fluctuations since the purchase date of the assets are not accounted for, in the instances where the assets that have been imported.
- Depreciation for book and tax purposes rarely reflects economic value or remaining utility.
- Book values do not equate to market-based Fair Value.
In an M&A context, using such shortcuts can materially distort the balance sheet and misrepresent the true worth of the acquired entity’s physical assets — creating risk for both buyers and their auditors.
Fair Value Requires Market Insight and On-Site Verification
Professional, independent valuation of tangible assets ensures that Fair Value — as defined under both IFRS and US GAAP — is determined based on real market data, not internal estimates or accounting entries. This means:
- Conducting physical inspections of the major assets to verify existence, condition, and functionality.
- Applying a market-based approach, often incorporating cost, income, and/or sales comparison methods depending on asset type.
- Considering obsolescence, utility, and economic trends that influence current and future value.
This approach provides a much clearer picture of what the acquiring entity is truly purchasing and helps justify the transaction price in a defensible way.
Why Useful Remaining Life Matters
Beyond establishing Fair Value, acquiring companies must also assign a Useful Remaining Life (URL) to each class of tangible asset. This is essential for:
- Accurate depreciation schedules post-acquisition,
- Financial reporting and audit compliance, and
- Ongoing capital planning and asset management.
The URL is not simply an accounting estimate — it must reflect physical wear, maintenance history, functional utility, and technological relevance. An experienced appraiser can provide a well-supported analysis that aligns with audit expectations and industry norms.
The Cost of Getting It Wrong
Failing to properly value tangible assets can have significant consequences:
- Overstated goodwill that may later trigger impairment losses,
- Increased audit risk due to lack of substantiation,
- Disputes during post-deal adjustments, and
- Misaligned investment assumptions that affect ROI calculations.
In contrast, a credible third-party valuation brings transparency, accuracy, and defensibility to the transaction — reducing risk and increasing stakeholder confidence.
Partner with the Right Experts
As a Canadian-based valuation firm with deep experience in tangible asset valuation, our team specializes in conducting detailed inspections and applying real-world market data to deliver reliable, audit-ready results. We support M&A transactions across a wide range of industries — ensuring our clients are equipped with the insights they need to make informed decisions and meet regulatory requirements.
In a market where every dollar counts, accurate valuation isn’t a formality — it’s a strategic necessity.
How Rising Costs Are Affecting Public Sector, Industrial, and Commercial Property Owners
With the recent reintroduction of tariffs between the United States and Canada, property owners across the country are facing a new layer of risk. These trade measures, designed to protect domestic industries, are having unintended consequences on construction costs, equipment pricing, and ultimately, insurance coverage. For public sector institutions, industrial facilities, and commercial real estate holders, it is now more important than ever to ensure their insurance values reflect current realities.
At the heart of this issue is the concept of replacement cost — the amount it would take to rebuild a property or replace equipment with materials of like kind and quality at today’s prices. When tariffs increase the cost of imported steel, aluminum, lumber, and machinery, the replacement cost of buildings and machinery and equipment also goes up. Without an updated insurance appraisal, property owners are at risk of being significantly underinsured.
- Tariffs Are Driving Up Replacement Costs
As of 2025, the U.S. has imposed 25% tariffs on Canadian steel and aluminum, and duties on Canadian softwood lumber are approaching 40%. These materials are foundational to construction and manufacturing. From structural steel and rebar to window frames, ductwork, and framing lumber, nearly every component of a building or piece of equipment is now more expensive to replace.
This impacts insurance in a very direct way: if your policy is based on outdated valuations, your coverage might not be sufficient to cover a total loss. This can result in significant out-of-pocket expenses for rebuilding or replacement.
- Avoiding Co-Insurance Penalties
Most commercial and public sector insurance policies include a co-insurance clause. This provision requires that the insured value of a property be within a certain percentage (often 90% or 100%) of its actual replacement cost. Failure to meet this threshold can result in penalties, even if the loss is partial.
In a tariff-inflated cost environment, many property owners may unknowingly fall below this threshold. An appraisal performed by a qualified firm ensures compliance and helps protect against these avoidable penalties.
- Accounting for Supply Chain Changes and Tariff-Related Costs
Tariffs have not only raised prices but also disrupted global supply chains. Contractors and equipment suppliers are now sourcing materials from alternate markets, often at higher prices and with longer lead times. These hidden costs — logistics, duties, expedited shipping, and procurement complexities — all factor into what it truly costs to rebuild or replace assets.
An accurate appraisal includes these updated cost considerations, helping property owners set realistic insurance limits.
- Industrial and Specialized Equipment Risks
Industrial operations face a unique set of challenges. Much of the machinery and equipment used in manufacturing, energy, and processing industries is imported or built with tariff-affected materials. Replacing this equipment is now significantly more expensive.
If you have not completed an insurance appraisal recently, there’s a good chance your coverage doesn’t reflect these increases. An appraisal can capture current values and protect against coverage gaps that could delay or hinder recovery after a loss.
- Public Sector and Commercial Real Estate Implications
Municipal buildings, schools, hospitals, and other public assets must also contend with rising construction costs. For government entities with tight budgets, being underinsured can have major implications for recovery and service continuity following a disaster.
Similarly, developers and commercial property owners operating on thin margins or under fixed-price contracts could find themselves severely exposed if their insured values are outdated. Appraisals are not just for insurance; they also support budgeting, capital planning, and financial reporting.
- Strengthening Insurance Placement and Claim Support
In today’s market, insurers are paying closer attention to insured values. A current, professionally prepared appraisal provides credibility and helps in securing favorable terms and conditions during renewals. It also improves claim outcomes by demonstrating that values were based on independent, up-to-date analysis.
The Bottom Line: Now Is the Time to Act
Tariffs are reshaping the cost landscape for construction and equipment across Canada. For property owners, staying ahead of these changes means ensuring your insurance coverage is accurate and defensible. A professional insurance appraisal is a proactive, cost-effective step that protects your assets, improves compliance, and provides peace of mind.
Whether you’re managing a municipality, running a manufacturing operation, or investing in commercial real estate, now is the time to reassess your property values. In a volatile trade environment, knowledge is not just power — it’s protection.
In recent weeks, British Columbia experienced earthquakes on February 24 and March 3, 2025. There were also seven earthquakes in 2024 with magnitudes ranging from 5 to 6.4. While the effects were not large, their frequency acts as a reminder of the critical role of emergency preparedness.
Earthquakes can strike without warning, leaving communities without essential services and supplies. Suncorp Valuations supports the belief that a well-stocked emergency kit can make a significant difference in ensuring your safety and well-being in the aftermath of a disaster.
Below, we have outlined a comprehensive checklist of essential items to help you and your loved ones stay prepared and resilient in the face of an earthquake emergency.
SURVIVAL ESSENTIALS
These items are necessary to sustain life immediately after an earthquake when help may not be readily available:
- Water: At least 4 liters per person per day for a minimum of three days (for drinking and sanitation)
- Food: Non-perishable food items with a long shelf life
- First Aid Kit: Basic medical supplies including bandages, antiseptic wipes, pain relievers, and prescription medications
- Emergency Blanket: Thermal blankets to retain body heat
- Multi-Tool or Knife: Useful for various tasks such as opening cans or cutting materials
- Flashlights: Battery-powered or hand-crank flashlights
- Extra Batteries: For flashlights, radios, and other essential devices
- Whistle: To signal for help
- Portable Phone Charger: Preferably solar-powered or battery-operated
- Cash: Small bills and coins in case ATMs and credit card systems are down
- Important Documents: Copies of identification, insurance policies, and emergency contact lists in a waterproof container
SAFETY & PROTECTION
These items help protect against hazards caused by the earthquake and ensure security:
- Dust Masks (N95 preferred): Protect against inhaling dust and debris
- Work Gloves: To handle debris safely
- Sturdy Shoes: Closed-toe shoes for navigating damaged areas
- Protective Eyewear: Shields against airborne debris
- Duct Tape & Plastic Sheeting: Useful for sealing off contaminated areas
- Local Maps: To find evacuation routes and emergency shelters
- Emergency Radio: Battery-powered or hand-crank radio to stay informed about updates and rescue efforts
MISCELLANEOUS/ADDITIONAL CONSIDERATIONS
- Personal hygiene/toiletries items: Such as an extra pair or glasses or contact lenses
- Stationery: Pen and paper or notepad
- Keys: House and car
- Store the kit in a durable, accessible container
- Check and update supplies every six months
- Customize the kit based on household needs (e.g. pet supplies, infant necessities)
- Consider keeping a smaller version in your car in case you are not home during an earthquake
By assembling a well-prepared earthquake emergency kit, you can improve your ability to stay safe and sustain yourself in the aftermath of a major earthquake.
SUNCORP’S RISK SERVICES GROUP
Being proactive is a key element to risk management for your business or personally. At Suncorp, our commitment extends beyond standard property appraisals. We offer specialized risk inspection services designed to:
- Identify Potential Hazards: Our detailed inspections help uncover risks that might not be immediately visible, ensuring no threat goes unnoticed.
- Provide Expert Analysis: Our experienced team analyzes potential risks and offers expert recommendations to mitigate them effectively.
- Enhance Property Safety: By addressing risks proactively, you can enhance the safety and security of your property, protecting both your investment and occupants.
- Ensure Regulatory Compliance: Stay ahead of regulatory requirements by addressing potential risks identified during our comprehensive inspections.
If you’d like to learn more about how our team can assist you with risk management, please don’t hesitate to reach out to Shamair Turner – Manager, Risk Management at Shamair.Turner@suncorpvaluations.com.
