How Much Is Enough ? Peter Millington ACII Director Nasty Stuff In - - PDF document

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Oct 02, 2023 274 likes •323 views

23/09/2014 How Much Is Enough ? Peter Millington ACII Director Nasty Stuff In Insurance Policies Claims Conditions Endorsements, conditions and WARRANTIES Average (Underinsurance) Is there An Underinsurance Problem ? Royal

SLIDE 1

23/09/2014 1

How Much Is Enough ?

Peter Millington ACII Director

Nasty Stuff In Insurance Policies

Claims Conditions Endorsements, conditions and WARRANTIES Average (Underinsurance)

Is there An Underinsurance Problem ?

Royal Institute of Chartered Surveyors - up to 80% of Commercial Buildings are probably underinsured Chartered Institute of Loss Adjustors - 40% of Business Interruption Policies are underinsured with the average shortfall being 45% Building Cost Information Service – 1 in 4 homes are underinsured Association of British Insurers – UK Insurers paid out £5.8 million to business for property damage claims every day in 2006

SLIDE 2

23/09/2014 2

So What Is The Problem ?

“If at the time of damage the sum insured for any item is less than the value

f the item covered by

such sum insured , the amount payable by the Insurer will be proportionately reduced”

A Calculation

Sum Insured Claim x Loss = Sum True Value at Risk Paid £500,000 x £20,000 = £10,000 £1,000,000

The Business

Gross Profit Definition Turnover less :

Purchases Packaging Transport

Adequate Indemnity Period

SLIDE 3

23/09/2014 3

Considerations

Buildings / Contents / Stock

Age of Building
Definition of a Building
Listed Status
Materials
Applicable Building Regulations
Location
Debris Removal Costs &

Professional Fees

VAT
Reinstatement or Indemnity
Cost of Stock
Seasonal Trading

Business Interruption

Are all businesses included
Are all activities included
Correct Gross Profit definition
How long to rebuild
How long to replace machinery &

stock

How to long to build the business

back up to levels enjoyed just before the damage

Anticipated growth of business in

the years to come

Any key customers or suppliers

Tips

1. Create an asset register :

a. Include serial numbers of business equipment b. Show replacement costs as new and as second hand c. Keep a copy off site

2. Take photographs and videos of buildings, machinery, equipment, stock :

a. Keep a copy off site

3. Have your Commercial Buildings Professionally valued for their rebuild cost every three years 4. Review your own home buildings sum insured adequacy for free at http://calculator.bcis.co.uk/calculator/calculator.aspx 5. Keep your insurance broker updated with any changes

Questions

Sentinel Corporate Risk 7 Camden Place Preston Lancashire PR1 3 JL Tel 01772 789455 Fax 01772 789465 www.sentinelrisk.co.uk