Imagine a storm hitting or a flood occurring at your business premises and not being able to afford the repair work as your insurance won't cover the full cost. Well, it's the fire many small to medium business owners are playing with.
Insurance provider Zurich has released a warning to business owners about a rising trend among SMEs, claiming up to 80% of commercial properties in the UK are underinsured.
How and Why Are So Many SMEs Underinsured?
One of the key reasons for this underinsurance is the infrequency of valuations taking place. Asset values and customer circumstances can fluctuate greatly, whether this is because of sales peaks or diversifying markets, therefore it is essential to run regular assessments to ensure insurance will cover all of a business' needs should an incident occur.
If these valuations are not conducted, businesses may end up out of pocket and unable to recoup losses in their entirety.
For example, if your premises has a buildings and contents policy for £1million, but is actually worth £1.5million, you will only be covered for two thirds of your assets. Therefore, should an extreme case occur, you would likely be able to rebuild, but not replace the contents, or vice-versa.
In short, spending a small amount of time and money could save you a lot in the long-run, and educating business owners on the dangers of underinsurance is essential.
Please note: Some policies may have a clause in the contract stating that an average will be applied if a business is found to be underinsured. This means the pay-out can be reduced in proportion to the amount under-insured.
Therefore, it is extremely important to know the true value and read the fine print of any policies you take out. If you don't know what your commercial property is worth, you may benefit from a professional valuation.
Business Compare Makes Avoiding Underinsurance Easy
Whether you're taking out cover for the first time or seeking quotes because your renewal is due, our trained and friendly team can guide you through the insurance quote process and help you to ensure the right level of cover for your business.
Call 0333 202 6240 to speak to a member of our team, or compare insurance quotes online now.
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