The British Insurance Brokers’ Association (BIBA) has released a new guide to help small and medium enterprises (SMEs) avoid under-insurance in the wake of the Brexit vote.
The industry body said the guide aims to help companies buy the right level of cover to protect themselves against loss or damage to property and injury to employees or someone else caused by their business.
In BIBA’s guide, businesses are advised to get correct and regular valuations, to consider risks to their business and to base the sums insured for buildings on the cost of rebuilding and not the market value.
“Insurance brokers have long raised the issue of under-insurance with us and we all want to ensure that claims are paid quickly and in full to help businesses recover when disaster strikes,” said BIBA executive director Graeme Trudgill.
“A simple way to ensure this is to make sure that the correct levels of insurance are in place at the beginning or at renewal, along with considering any increased expenses to import goods from the EU that might impact the cost of a claim,” Trudgill added.
According to BIBA, businesses are “potentially more vulnerable to the risks of under-insurance as a result of uncertainty in the run up to Brexit leading to a fall in the value of the pound.”
Currency fluctuation may make it more expensive for SMEs to import goods such as replacement equipment, plant or machinery, BIBA added.
“It is important for businesses to review their cover regularly with their broker who can help,” Trudgill said. “We hope that our new guide will help businesses address the under-insurance issue that the Financial Conduct Authority found.”
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