- A-Plan estimates a significant proportion of Cheshire businesses may be underinsured
- A-Plan launches new commercial office in Macclesfield to meet the growing local need for specialist commercial insurance
Cheshire businesses are being urged by A-Plan’s Macclesfield branch, who are business insurance specialists, to check all their current property sums insured (to include stock, materials, machinery etc.), and make sure they are not potentially underinsured as a result of the recent inflationary surge in material and labour costs.
If underinsured, which means not having the right level of insurance to match the replacement value of the property, then business owners risk potentially costly consequences if they need to make an insurance claim, including the claim not being paid in some circumstances.
This warning comes from A-Plan’s established Macclesfield branch, where Callum Hillman, Branch Manager says: “Underinsurance is a problem for all business owners, so I strongly urge Cheshire-based businesses to reassess their current insurance cover, if they haven’t done so in the last six months. According to a report of UK Company Formations (1), as of 2020, there are over 78,000 businesses that call Cheshire their home; from major international brands to strong SMEs within the community here. We estimate that a significant proportion of these may be underinsured and at risk.”
A specific example of this is how these inflationary pressures have left commercial property-owning businesses exposed and potentially underinsured relating to the rebuild costs for their properties. The rising cost of construction is now outstripping the wider rate of inflation and has been since the start of the year due to the surging costs of materials (exacerbated in recent months with the Ukrainian and Russian war). This means that many businesses will now have inaccurate insurance values as the replacement value will have increased disproportionately, leaving business owners underinsured.
In a recent UK-wide set of 450 insurance valuation surveys conducted by Barrett Corp & Harrington, who are the UK’s leading supplier of buildings insurance valuations to the UK insurance market, 84% of insurance valuation surveys they conducted showed the property owners were underinsured.
On this specific issue Hillman says: “It’s important for landlords to note that a property’s market value and its insurance value are not the same; insurance value refers to the cost of rebuilding a property, so will include materials, demolition, and labour for example; all of which have increased in recent months.”
Hillman adds: “Now more than ever, with higher concerns over cost of living and day-to-day business operations, it is important for property owners to make sure their sums insured reflects what their exposures are if the worst were to happen. Any business owner or landlord in Macclesfield and surrounding areas with concerns about underinsurance can come into or call our local branch and speak to a commercial advisor. Our team can then support you to ensure you don’t end up with a shortfall if or when claims are made.”
A-Plan Macclesfield brings this warning and education for local businesses at a time when it is launching its new commercial office as part of the existing branch, designed to meet the growing local need for specialist commercial insurance. A-Plan has a strong, embedded business presence in Macclesfield that goes back to when the branch opened in 2014. The launch of the new commercial office is testament to its continued investment in the growing business community to further support Cheshire clients.
The specialist insurance broker, which recently scooped the prize for ‘broker of the year’ at the British Insurance Awards, has over 40 offices that specialise in business insurance needs. This means the company is collectively helping over 50,000 local business clients across the UK with specialist insurance advice and cover.
To find out more about underinsurance and what landlords need to do to update their rebuild value, read A-Plan’s latest blog: https://blog.aplan.co.uk/landlords-could-your-properties-be-underinsured/
