It is probably pretty obvious that being underinsured is not a great situation to be in. But a clause known as “The Average Clause” means that you could be underinsured by far more than you realise.

A lot of people have not heard of the average clause, but it could be devastating for your business.

When you insure a building, you decide the amount that you would like to insure it for. It is important to remember that this amount should be the cost to rebuild the property from scratch.

If you insure your property for £500,000, but the rebuild cost of £1,000,000, then that leaves a £500,000 deficit that you would need to cover yourself.

But that isn’t all. If your property was to experience, for example, £50,000 worth of damage, you might think that you are covered. You have £500,000 of cover, right? No. Your property is underinsured by 50% and so the maximum amount that the insurer will pay is 50% of your claim, which is £25,000.

So how do you avoid this?

The best way to make sure that your property is correctly insured, is to have a Rebuild Cost Assessment. The cost to rebuild can change, as cost of labour and materials increase, and so although you may have been correctly insured a few years ago, you might find that now the amount is not sufficient.

Our team at Hensure can advise on acquiring a survey.

Contact us today on 01270 758056.