22 September 2025

Storm-proofing your business

By Malcolm Stewart Head of HKJ Commercial
Illustration of a marina featuring a chandlery, dock, and apartments for sale—ideal for marine trade policy insights.

Why correct sums insured matter

The past few years have shown us just how unpredictable the weather can be. Storms and extreme conditions have led to a rise in claims, highlighting one key issue: underinsurance. Ensuring your material damage sums insured are accurate is not just a box-ticking exercise—it’s essential protection for your business.

Why sums insured matter

Assets owned by a business rarely stay static. From one renewal date to the next, it’s natural for values to rise as you acquire new buildings, stock, tools, or equipment – or to fall when assets are sold off, retired, or otherwise removed from use. As brokers, we always ask for updated figures to make sure your cover reflects the true scale of your business operations.

 

Rebuild values vs. market values

When it comes to buildings, insurers base their calculations on rebuild costs, not the market value of the property. In today’s climate—where labour, materials, and supply chains are under constant pressure—these costs can fluctuate significantly. HKJC can provide an inexpensive facility to help assess these rebuild values, ensuring they’re realistic and reliable.

 

Regular reviews are essential

Beyond buildings, other sums insured—such as stock, materials, and equipment—should also be reviewed regularly. We recommend doing this at least every six months as part of an insurance review or incorporating it into your wider business continuity planning. Keeping an up-to-date inventory not only helps to establish correct sums insured but can also help in the event of a serious loss by identifying what was in the building at the time of the incident, avoiding any nasty surprises.

 

Avoiding the ‘average clause’

The risk of underinsurance is that insurers may apply what’s known as the average clause. This means if your sums insured are too low, any claim payout could be reduced in proportion to the under-declared value. In other words, you may not receive the full amount you expect, just when you need it most.

Our role is to make sure your cover keeps pace with your business. By reviewing sums insured, checking rebuild costs, and advising on best practice, we can help storm-proof your insurance cover and protect your business against avoidable shortfalls.

If you’re unsure whether your sums insured are correct or would like to take advantage of our rebuild valuation facility, please get in touch.

Call us today on
01905 930 760
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