It’s not just the weather that changes with the seasons. At certain times of the year many businesses experience an increase in demand, Christmas being an obvious time with retail, manufacturing, warehousing, and hotel and leisure. 

Underinsurance due to seasonal increase

An increase in demand often means an increase in levels of stock or raw materials, meaning businesses are often housing larger quantities of goods than normal. The implications of this can vary but for some businesses this increase may take them over their declared sums insured on their insurance.

Speak with your broker

Some insurers include a percentage extension to their policies to take into account these increases. This percentage can vary from policy to policy and could range anywhere from 5% to 30%. Often, any percentage extension will have a time limit pre-set by the insurer and, therefore, may not cover the required length of time or time of year that your business requires an increase.

What is Underinsurance?

Underinsurance refers to an insufficient insurance policy. Should your stock levels be above the limit stated within your policy you may be classed as underinsured.

Why is it important

Should the worst happen, and you need to make a claim, your insurer will send out a Loss Adjuster, whose aim is to review all aspects of your business. This review will include any stock limits, turnover and customer goods in trust declared at the point of policy purchase. If you are found to be underinsured, your insurer can do one of a number of things, including, decreasing the claim settlement by the percentage of underinsurance, increase your premium or refuse to pay the claim altogether.

Discussing the required increase at point of renewal takes away means you won’t need to remember to call your broker at what will be your busiest period.  Speaking with your broker will often be at the back of your mind when you are busy planning, bringing on additional staff and generally running your business. Ensuring you account for seasonal increases when taking out or renewing your insurance policy allows your business to understand any cost implications and allows you to bring this into pricing and budgeting for the year.

If you think you may be affected by this then speak with your broker who can advise if you currently have this cover and for what percentage and period.

Our team at Safe and Insured are always on hand to offer advice. Speak to our team on 0808 161 7008 who can review the cover you currently have in place and offer their bespoke advice for your business.