Revealed: The Most Commonly Underinsured Commercial Policies

2 March 2020

If your business is underinsured, your company’s assets are being valued and insured at less than their true worth, leaving you inadequately protected. Therefore, in the event of a disaster, you would be compensated for less than the true value of your loss.

Any commercial policy can be underinsured, but insurance experts identified the following as the most common areas of concern:

  • Buildings — An estimated 80 per cent of UK commercial properties are underinsured, according to a recent survey. Failing to regularly reassess the value of your property and adjust your policy could leave your business unprepared for even the smallest losses.
  • Contents — Insurance experts confirm that many organisations fail to provide correct valuations of property assets on their business contents policy, leading to inaccurate sums insured. Maintaining a frequently updated inventory of all contents and equipment onsite (e.g. machinery, technology and even office supplies) is the best way to ensure it will all be covered when making a claim.
  • Business interruption (BI) — A recent study found that over 40 per cent of UK organisations’ BI policies are underinsured, largely due to insufficient indemnity periods. Be sure to establish an indemnity period that gives your business enough time to recover after a loss.
  • Cyber-liability — Government data found that although over 30 per cent of UK organisations experienced a cyber-attack in the past year, just 11 per cent possess proper cyber-insurance.

Nevertheless, purchasing robust cyber-cover is a crucial business precaution to offset the risk of a data breach.


The content of this Profile is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2020 Zywave, Inc. All rights reserved.

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