Has Inflation left you Underinsured?

15 Sep 2022

Published in: Member News

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Thousands of businesses left underinsured amidst material/assets inflation

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UK inflation has hit a 40-year high and is expected to keep rising.

This has seen average materials costs increase by at least 27% (Building Materials and Components Index, July 2022), which means that your business assets are likely to have a significantly higher replacement cost than they did several months ago.

If that is the case, you are likely to be considerably underinsured, and the financial consequences can be devastating.

Put simply, if you suffer from any type of property or business loss that results in a claim, you might find that it could fall short of what today’s actual cost is to replace or rebuild. How would your business cope if you suffered a major loss, but you were underinsured?

How could this be avoided?

• Commercial property – Rebuild costs for property have risen sharply over the last    few years. This is the key area where your business could be at risk. Market value is  not equal to rebuild cost, and it is advisable to obtain a rebuild value on your            property every three to five years.

• Contents, stock, plant, and machinery – create an asset register and regularly    check replacement costs to ensure they are accurate.

• Business interruption – Material and labour shortages, supply chain hold-ups, factory closures, and restrictions at ports all mean that in today’s conditions, it could take longer than usual to return to the position that your business was in before the loss occurred. You may need to consider extending the indemnity period of your policy.

How can KGJ support you?

As proud members of the Black Country Chamber, we want nothing more than to ensure our fellow members are safe and secure in their business.

We would welcome an opportunity to conduct a no-obligation review of your insurances, and thoroughly assess your business’s specific needs and potential risks.

Get in touch today to find out how we can help uncover your underinsurance risks and build a robust protection strategy that keeps your business safe and thriving.

Author – Samantha Halden, Client Relationship Director, KGJ Group (an NFP company).

LinkedIn: https://www.linkedin.com/in/samantha-halden-insurance/

Email: samantha.halden@kgjgroup.co.uk Tel: 07791 578900