Sheffield Broker Advice to Help SMEs Combat Underinsurance
5th October 2015
Sheffield chartered broker IFM Insurance today warned small business owners in South Yorkshire to ensure their business is properly insured and not at risk.
This follows latest research by AVIVA which revealed that up to 40% of SMEs have not reviewed their level of insurance coverage in the last 12 months. Research also found that 1 in 5 SMEs were not confident that they have the right insurance cover and that's a situation that could leave them out of pocket. Aviva's survey team found 177 cases where customers had been underinsured on average, by £486,000. Examples of where insurance needs might have changed for a local business, which can result in underinsurance include: 1. the property hasn't been professionally valued for 'insurance purposes' in the last 3 years 2. the property has been altered or extended 3. insurance cover has been based on the market value of the building instead of what it would cost to rebuild your property 4. you haven't factored in costs for gates/fences, car parking areas in your calculations 5. the property is a listed building (because the time and cost of repairs/rebuilds are likely to be far greater) 6. you haven't factored in the costs of professional fees such as an architect or surveyor 7. you haven't factored in costs such as site clearance or access particularly where your business might need, say, a crane to help with remedial work 8. you are carrying more stock now than you did when you took out your insurance policy 9. the business is now VAT registered 10. you have some new plant or equipment that you haven't told your broker/insurer about John Leigh, Director of IFM Insurance said, "Underinsurance is a real problem for small firms and cutting the cost of their insurance can be a false economy. In the event of a major claim this degree of underinsurance can be devastating, especially as the majority of businesses never recover from a major loss such as a fire. That's why it's important to speak with a broker to make sure you have the right amount of insurance cover for your business."