Tysers, a leading independent Lloyd’s broker and a member of the AUB Group warn that the impact of changing weather patterns in the UK has left many businesses at risk of underinsurance for weather related events.
"Changing weather patterns and an increase in extreme weather related events have left many businesses at higher risk of flooding, storm damage and other weather related disruption. It’s important for businesses to review their existing cover to ensure there is no element of underinsurance,” advises Sam Towler, Client Director, North of England and Scotland at Tysers Retail.
Underinsurance: What you need to know
Underinsurance occurs when the policyholder has insufficient cover for their needs but still has some level of cover. If your business is underinsured and an incident such as extreme weather occurs, you may not be covered for all losses.
There are many areas where your business may be underinsured including:
Property
Commercial buildings of all kinds are vulnerable to flooding and other weather related events in addition to fire, theft and vandalism. Buildings should be insured for the full cost of a rebuild rather than market value including; materials and labour, professional and legal fees, demolition or make safe costs, site clearance and access costs.
Contents and Stock
When taking out a policy, it is important to determine the costs of replacing all stock and contents on a ‘new-for-old’ basis, even if a complete loss seems unlikely to happen as the total figure is required by your insurer to establish the total level of risk they are insuring.
Delays in replacing stock can also cause significant periods of business interruption, leading to more losses while the business is unable to resume normal trading.
Business Interruption
Business Interruption is another area where business owners are frequently at risk of being underinsured. This is often due to selecting a much shorter period of cover than the likely actual period of disruption, leaving businesses with ongoing additional costs after insurance pay-outs have ceased.
Read more about commercial underinsurance here: https://www.tysers.com/underinsurance-a-threat-to-uk-businesses/