Reasons Why You May Need Insurance Brokerage Valuation Completed

There are many factors that play into valuing an insurance brokerage, including the assets the business owns, how much the business makes, how steadily the business is growing, and what is happening in the insurance market. Valuing an insurance brokerage business is complex and time-consuming, and as such, it is something that is typically only done if the need arises. Here are a few of the most common reasons why you may need insurance brokerage appraisals or valuations completed. 

An Insurance Brokerage Business is Being Bought or Sold

One of the primary reasons why you may need insurance brokerage valuation completed is because the business is changing hands. Any time a business is being bought, sold, or any other type of buy-sell agreement is taking place, the business needs to be properly valued. In many cases, both the buyer and the seller hire their own professional to complete the valuation process. This is done to ensure that the sale is a fair price for all appropriate parties.  

You Need to Know the Value for Financial Reporting Situations

Another key reason why you may need insurance brokerage valuation completed is because you need to know the current estimated value of your company for financial reporting situations. If you are going through a divorce, the divorce courts may ask for the valuation. If you are looking to buy a home, the lender may ask for a valuation of the company you own. Or, if you are looking to take out a business loan, the lender may ask for the valuation of the company. 

Bankruptcy or Restructuring Are Taking Place

The final reason why you may need insurance brokerage valuation completed is because you are filing for bankruptcy or a restructuring plan. When either of these take place, the courts and your creditors will ask for a valuation of the business. It can also be helpful to you, as the business owner, to see if your business is still viable through restructuring or if you need to file for bankruptcy and walk away from your business completely. 

An insurance brokerage valuation can help you determine how much your insurance brokerage business is valued. While this information may be nice to know, due to the complexity involved in valuing a company and the cost involved, many business owners do not have this done unless it is absolutely necessary. If the business is changing hands, if you need the information for a financial report situation, or if you are declaring bankruptcy or restructuring the business, reach out to a valuation company, such as Insurance Agency Appraisal, to learn how much your insurance brokerage is valued. 

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