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Does your policy provide the protection you need

Accidents and incidents do happen and whilst we hope you never have to call on your insurance policy, it is key to make sure that it is fit for purpose and provides the protection you need.
Unfortunately, if you do not have the correct cover in place, then there is a risk that claims could be refused or settlements reduced following a loss.

How do you prevent that from happening?

There is no substitute to professional advice and guidance on your insurance matters and this should be sought at all times. Yet there are common areas where claims problems can occur and it is worth bearing the following in mind when reviewing your insurance policy.

Sums insured

Typically if machinery, plant and other physical assets are insured on a reinstatement basis, the equipment will be replaced with new. Purchasing second hand, price fluctuations, exchange rate changes and forgetting to add newly purchased equipment can all have a significant impact on the adequacy of the sums insured, potentially causing problems with underinsurance should a claim arise. Regular reviews of the sums insured is a must.

In addition it is believed that up to 80%1 of commercial properties are underinsured with out of date valuations being used as the basis for cover.

To help reduce the risk of under-insuring your properties and your assets, a proper valuation by a professional valuation company is strongly recommended.

Indemnity periods

Having the wrong indemnity period on the policy is an all too familiar issue with business interruption claims.
This element of cover is designed to get the business back to the level it was trading at prior to the loss. However, the policy will only operate to the indemnity period specified and purchased.

There are many things to consider but you should allow time for:

 Getting the claim approved by insurers.
• Seeking alternative premises, if appropriate.
• An HSE/Environment agency investigation, if appropriate
• Connection of services.
• Removal of debris, including hazardous materials such as asbestos.
• Planning/local authority/landlord approval.
• Tender for works and completion of works.
• Lead times on replacement machinery.
• Installation and commissioning.
• Moving back in.
• Getting your staff back/replaced.
• Get your turnover back to the level it is now.

Terms & Conditions

From time to time insurers may impose specific requirements that need to be adhered to if the policy is going to perform during a loss. There are numerous conditions an insurer may apply and the key thing is you understand what they are and that you are complying.

If you can’t comply you need to notify your insurers as soon as possible. Your insurance advisor has a duty to make sure you are fully aware of the conditions and that you can meet the requirements.

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