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If you run a business, then you’ll hopefully have all the right insurances in place - but what if the amount you’re insured for no longer reflects what the insured is actually worth? Then you might not be covered as well as you think…

Underinsurance is real - and if you are underinsured, it can leave you facing a shortfall just when you need your cover most.

As an example, imagine a piece of equipment would cost £100,000 to replace, but you’ve insured it for £50,000. In this case, depending on your policy terms, the insurer may reduce the claim in proportion to the underinsurance. It would work the same if you had something that would cost £1000 to replace, but you’d only insured it for £500.  Either way, depending on your policy terms, it might result in your business having to fund part of the loss.

We really hope you’re not underinsured, but it can be fairly easy for figures to fall behind. Perhaps you’ve bought more stock, invested in newer machinery or expanded your premises?

Even if nothing inside the business has changed, the costs of replacing items may have increased since you originally took out the policy.  That’s why, the best way to make sure you’ve got the right level of insurance in place is to check your cover BEFORE you need to claim.  Any shortfall can put real pressure on cash flow – and you don’t want to be having to pay for repairs or replacements when you thought you were totally covered.

To check the value of your cover, speak to a friendly insurance broker, like the team at Prizm Solutions. Whenever there’s any important changes to your business, it’s always worth picking up the phone or dropping your broker an email to check whether there are any knock-on effects insurance-wise.   Even if the broker tells you that the change doesn’t affect anything, he or she will have enjoyed having a chat with you and catching up on how you’re doing! 

The key message is, don’t wait until renewal if something significant has changed in your business - always tell your insurance broker straight away. 

At Prizm Solutions, we’re always happy to have a chat with you, to check the cover you actually need is the cover you actually have in place. After all, a conversation now could help you avoid an expensive and unwanted surprise later.

Prizm Solutions can help with a wide range of business and personal insurances, from Business Interruption Insurance, Public Liability Insurance and Contractors All Risks Insurance, to Flood Insurance, Legal Expenses Insurance and Renovation & Property Conversion Insurance.  Feel free to give us a call, we’d love to help.