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Make sure your business is not under-insured


By Dave Stallon, Commercial Director at FSB

It’s possible that as many as 80 per cent of businesses in England and Wales are under-insured, according to research by industry bodies RICS and BCIS. 

As small business owners, we can be heavily reliant on an insurance payout if we’re to stay in business following an unexpected incident, such as flooding or fire, that affects our buildings. If a business is under-insured for buildings, it will have to make up the shortfall in repair costs itself.

For example, if your building is worth £500,000 but you have told the underwriter it’s worth half of that, you will only receive half the payment you need if you have to claim. A claim for £50,000 in fire damage would result in a £25,000 bill for you.

Business interruption, contents, personal injury calculations and all types of other 
policies are also at risk of under-insurance. 

As small business owners, we work to a quite tight cash flow, and we really can’t risk being under-insured – even if it’s just by 20 per cent. That can really affect the bottom line.

To help FSB members check that their buildings sum insured is in the right range, FSB Insurance Service has set up an online commercial valuation indicator. This will give you a ‘traffic light’ indication about how accurate the projected rebuild cost is.

If you have any commercial insurance concerns, please remember that all members can access FSB Insurance Service for advice on 020 3883 7976 or at, whether they buy insurance through them or not.