Even if you have insurance policies in place to protect your organisation from the worst-case scenarios, this cover won’t be nearly as effective in the event of a claim if you are engaging in an increasingly common business mistake occurring throughout the country—under-insurance. Indeed, research from the Royal Institution of Chartered Surveyors revealed that as many as 80 per cent of UK organisations are thought to be under-insured. Don’t let your organisation suffer the severe consequences of under-insurance in the event of a disaster. Review these top indicators of under-insurance to ensure robust cover:

  • Incorrect valuation

Many organisations incorrectly value their property due to a variety of reasons (e.g. not conducting regular value reviews, not updating value after alterations or extensions, misunderstanding the difference between rebuild cost versus market value and not factoring in costs such as car parks, gates or paving), thus generating inadequate sums insured.

  • Stockpiling problems

Your business may carry or store more stock on-site at different times throughout the year (e.g. for seasonal reasons or to prepare for Brexit). However, failure to update your broker on current stockpiling practices could result in under-insurance issues in the event of a claim.

  • Business interruption issues

Even with business interruption cover in place, your organisation will have complications if your policy contains incorrect sums insured (e.g. excluding vital costs from your policy, such as payroll) or insufficient indemnity periods (e.g. only providing for one year recovery time after disaster).  Rebuilding, repairs and replacement of stock will take longer than you might think and all this can have an impact on how quickly you can start trading again.

  • Top Tips

  • Review your rebuilding costs every 5 years by using a surveyor or appraisal firm.  Contact us if you need the name of an insurer approved firm.
  • Create an asset register of all your equipment and contents, with up to date replacement costs – not written down values.
  • Consider how long it would actually take you to reach your current level of turnover if a fire damaged your property tonight, which caused you to rebuild, reinstate equipment, re-stock AND replace those customers that have left you in the meantime.

 

If you have any queries about insuring for the correct amounts, please get in touch using the form below or call us on 01527 306041