Underinsurance is the term given when property is insured for less than its true value. In the current economic conditions, business owners or managers may believe they are self-insuring their contents believing they may reduce their insurance premiums, however without correct advice this could have unintentional consequences.

Most insurance policies contain an average condition, this basically states that if an item is insured for £10,000 with an actually value of £20,000 then insurers will only pay 50% of the claim. Also with higher sums insured can come higher security conditions which, if not complied with, could result in claims not being paid or even policies being cancelled.

If you are looking for premium saving by self-insuring please discuss this with your broker or insurer so that they are fully aware of what you are trying to achieve and can assist you with your goal whilst ensuring you still get valid claims paid.

For further advice on any of the above please call our office 0845 270 6720.