In the current Economic Climate, a major loss can end a company, particularly if the company is not accurately insured.
Think about it- If your business suffers a fire, and your premises, machinery and stock is underinsured, your insurance company will apply “Average” to the settlement per policy condition. This means you will only get an amount paid out that is proportionate to the amount you are insured for.
For example: A company suffers a fire/flood causing €150,000 damage, and the building is insured for €200,000, but its Value at Risk is €400,000. This Formula is applied:
Sum Insured X Loss
————————————————– = Settlement
Value at Risk
€200,000 X €150,000
This leaves you with an Underinsurance shortfall of €75,000; a potentially ruinous figure, that in current market conditions you may not be able to borrow from your bank.
But this situation can be avoided!
A Value at Risk survey allows you to put an accurate value on how much your business is actually worth for Insurance purposes. Professionally done, it, includes all aspects of your Business, from Buildings, stock, Machinery, to Business Interruption.
With a value at risk survey you can review the adequacy of your insurance cover, thus avoiding underinsurance in the event of a claim.
Underinsurance affects many insurance claims. Do what you can to protect your business. After all, it’s not worth the risk.