We were recently introduced to a local veterinary practice and during our first visit, went through their existing insurance paperwork. It was disturbing to see that they were only insuring their contents for £46,000, which seemed odd bearing in mind the cost of medical equipment. Upon further discussion, we found that they had a review with their existing provider the year before but nothing was mentioned then.
The business owner agreed with our suggestion to prepare an asset register of all equipment, contents and fixtures installed when they first fitted out the practice – it came to a massive £149,000!
What was frightening is that if they had made even a modest claim of say £10,000, they might have only received £3,000. This is because insurers can reduce a claim payment by the same proportion as the level of underinsurance. A larger claim could have left the practice with a significant cash flow problem and could even have forced the business to close.
Fortunately, we were able to arrange a suitable policy with the correct sums insured, but without increasing their costs too much.
The lesson is always to keep your sums insured up to date.