Protecting your assets
Checking your premises are correctly insured and what we need to consider about climate
Most years, your policy doesn’t change much and it’s probably one you don’t spend hours checking but with reports many commercial properties are woefully underinsuredby £32.5bn, PM talks to Towergate about why it’s so important to check the details on your policies.
Towergate told us ‘A sustained rise in construction costs this year is increasing the likelihood of significant underinsurance of buildings in the UK, which means shops, factories, warehouses and many other commercial buildings are woefully unprotected in the event of a loss or damage.
Recent data from RebuildCostASSESSMENT.com has highlighted how on average, buildings are covered for just 68% of the amount they should be in Britain. However, with rebuild costs rising rapidly, the current situation is likely to be even worse.’
So why is the situation so chronic? According to the Builders Merchants Federation (BMF), prices have risen by between 10% and 15% for products and materials this year. However, some products, such as timber, have seen prices go up by 50% and by as much as 100% for oriented strand board (OSB) and other sheet materials, which are all key housebuilding components. The main factors at play here are pent up demand following Covid lockdowns and the re-starting of postponed building projects, as well as the impact of Brexit on imports from the EU. The loss of around 1.5 million foreign workers throughout 2020 and 2021, many from construction, together with increased demand in other countries for construction materials, such as high Chinese demand for steel and extended lead times for virtually all materials, have combined to create a perfect storm around rebuilding costs.
Towergate also pointed to the insurance issue with our homes as well telling PM the owners of as many as 580,000 homes across the UK worth over £1 million each are also significantly underinsured and should check their policies.
‘Now is not the time for businesses and individuals to find out that their property is underinsured and that their insurance policy will not fully cover a loss’, says Towergate’s Commercial Director, Mark Brannon. ‘The only way to ensure that you and your business are not underinsured is to have an up-to-date valuation.’
Valuations can be arranged for a small cost and you can speak to your insurance advisor to arrange this.
The information contained in this article is based on sources that we believe are reliable and should be understood as general risk management and insurance information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such. Towergate are preferred BPMA providers. For more information about Towergate services for members, visit bpma.co.uk Benefits section.
ReBuildCostAssessment.com survey 2021