Building Replacement Cost & Union Wages

As you think about the cost to rebuild your building, consider if your contractors would be union or nonunion workers.

If union, inform your agent and insurer that the construction cost estimates you have used are at union wages. Ask that the policy recognize the increased cost that union wages require. This needs to be done before you have a loss.

Absent the above, your insurer may limit your claim to the cost of nonunion labor. In some cities, using nonunion labor means public relations headaches. One client was genuinely concerned that using nonunion labor would result in pickets or other demonstrations by local trade unions.

I make no comment here on the desirability of unions or of using union labor. The reality is that in many cities prudent business people do not have a real option.