Warning from leading insurance broker
One of the UK’s leading insurance brokers is warning businesses struggling with the ever-increasing cost of living that they shouldn’t be cutting back on their insurance costs as they may not survive the consequences of being underinsured.
In the UK, 84% of property owners, both private and business, are underinsured*, meaning that if their property is damaged and they need to claim, the pay-out amount will not cover all of the costs of reinstatement, leaving owners vulnerable should the worst happen.
Robert Lewis, Corporate Broking Director at Towergate Insurance Brokers, said, “To put it simply, when agreeing on an insurance amount building owners should be looking at the same cost that it would cost to entirely rebuild including adequate provision for debris removal and professional fees. When businesses are underinsuring their commercial properties, they aren’t covering the entire cost and can be left with a significant shortfall, especially after a recent spike in construction costs.”
Data collected by industry specialist RebuildcostASSESSMENT.com shows that on average, buildings are covered for just 66% of their rebuild costs. These soaring costs would put even more financial strain on most businesses and homeowners with many unable to make up the deficit, especially during the cost of living crisis.
Robert said: “Not only is the cost of energy increasing rapidly, which has a major impact on production costs, there is also huge demand for building materials and ongoing supply chain issues. While people might be aware of this, they may not realise the impact it’s having on their insurance.
“Some people may worry that alerting their insurers to the higher rebuild cost of their property will increase their insurance premium, but this rise will be negligible and is a worthy investment in comparison to the shortfall in coverage should the property be damaged. Up-to-date valuation is key to ensuring that you aren’t left out of pocket following property damage, especially during the current crisis.”
Towergate Insurance Brokers is one of the UK’s leading independent insurance brokers and risk management advisors. Boasting an experienced team of insurance specialists, Towergate Insurance Brokers has built a solid reputation for understanding many business sectors and industries, and the everyday risks that they face in today’s increasingly complex world. They also look after the insurance needs of private individuals and families seeking tailored personal covers.
Towergate Insurance Brokers is a trading name of Towergate Underwriting Group Limited.
Registered in England No.4043759. Registered Address: 2 Minster Court, Mincing Lane, London, EC3R 7PD.
Authorised and regulated by the Financial Conduct Authority.