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Craig’s Corner – Equipment Valuation and Utilization


Craig Johns Arthur J Gallagher

One of the biggest hurdles I find in Oil & Gas Insurance is Equipment Valuations in this economy. Business owners all ask the same question… “What’s the machinery and equipment really worth?” Is there goodwill? Do only the tangible assets of the business have value? What if I am not using the equipment right now? If so, how are those assets valued? This value impacts your commercial insurance so it is imperative to seek out this information.

The biggest problem and frustration with Heavy Equipment Valuations that I have come across can be determining an accurate Fair Market Value of the machinery and/or equipment. The importance of knowing how much your equipment is valued at has an impact on your business and your insurance policy.  Book value is the difference between the acquisition cost and depreciation, which does not reflect the true value that would be obtained on the open market. However, Fair Market Value is the current value for which an asset may be obtained on the open market.

You’ll be better prepared to make business moves regarding insurance if you ask yourself these questions:

  • Are you becoming more “asset minded” due to cash flow and economic times?
  • Do you need to know machinery or equipment values to secure existing loans?
  • Is there a chance that your machinery or equipment loans are under-collateralized?
  • Is my equipment sitting idle right now?

If you answered yes to any of these questions you really should give me a call.

403-299-1007 or email me at craig_johns@ajg.com

We look forward to doing business with you soon.



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