Blog Post

43% of small businesses are underinsured

Anton Hilton • Dec 23, 2016

RUNNING A SMALL BUSINESS? ARE YOU SURE YOU HAVE ADEQUATE INSURANCE?

A recent study has revealed 43% of small businesses do not have adequate storm cover.

With another wet winter predicted, it is important small businesses review their existing insurance arrangements and there is no better way of doing this than contacting an insurance broker.

WHAT IS “UNDERINSURANCE”?

Example of how underinsurance can affect an insurance claim:

£100,000.00 is the rebuild cost of the property. The property is only insured for £50,000.00 (50%). A claim happens valued at £10,000.00. How much will you receive?

£10,000.00 because this is still within what the property is insured for
Nothing
£5,000.00

The answers is: C. Because the property is only insured for 50% of its value, the insurance company will only pay 50% of the claim. The insurance jargon for this is the “application of average”.

In extreme cases, underinsurance may void the policy and leave you with nothing.

Extremely high levels of underinsurance exist in the small business sector, with underinsurance for business interruption being the most prevalent. Business interruption is fundamental to the protection of a small business and is often overlooked or not properly understood when buying on line.

THE ANSWER

Contact P Jenkins and Co for a free and independent review of your small business insurance requirements. You might even save some money!

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