Is your home or business underinsured?
by Guest Blogger Andy Williams, Director at NSS, Blackburn House, Boughton, Nottinghamshire
Decisions relating to Value at Risk are highly important and often an overlooked aspect of any insurance cover. Guessing at the value of your property or businesses can lead to underinsurance and potential business closure in the event of unforeseen circumstances such as flooding, fire or burglary.
So, what is value at risk? Value at risk deals with the insurable value of your assets, it measures the areas of buildings and quantifies the content of machinery, stock and computer equipment. It also measures any loss a property owner/business would incur if closed due to a disaster, otherwise known as Business Interruption cover.
If you can confidently look at your property/business and know that you have all these figures correctly identified on your insurance policy then you are in a very good position when it comes to making a claim. However, it also means you are probably in the minority!
An accurate value at risk survey will give property/business owners and insurers/brokers the correct values to insure and eliminate a shortfall in claim settlement due to underinsurance. The survey may also save you money as over insurance can lead to wasted premiums.
Many claimants experience firsthand how the repercussions of a disaster is the catalyst for discovering their policy was incorrectly structured. NSS have been carrying out value at risk surveys for over 15 years and rarely find a business which has its optimum insurance cover.
A value at risk survey is a highly technical procedure which is carried out by trained and experienced professionals. For business owners in particular it gives an updated asset register and shows the calculated reinstatement value for all assets including buildings, machinery, stock, contents and loss of profits.
Due to the detail involved and the technical nature of a value at risk survey, it is unreasonable for you to expect a broker to take full responsibility for one’s sums insured. It is up to the property/business owner to have this assessed professionally to ensure that you are adequately covered.