Is my business underinsured?

Underinsurance is a concern for businesses as well as homeowners.  The results of underinsurance can be catastrophic for a business who makes a claim for property damage or business interruption.  Some insurers apply an 'average' or 'co-insurance' clause on their policies, which means if you insure for less than the full value of the property (or less than your full annual turnover or gross profit in the case of business interruption claims), a claim can be reduced in proportion to the amount of the underinsurance. 

Consequently, an underinsured business can be left with a fraction of the true claim cost in the event of a loss. The best way to avoid underinsurance is to get a survey of your building or appraisal of your goods by a professional, who will advise you of the correct value to insure for.  An accountant can offer the same service for your turnover and gross profit figures, in order to avoid underinsuring for business interruption.

If you've got questions about underinsurance, Westralian Insurance can help!  Call our friendly and knowledgeable staff today, on (08) 9302 1388 or visit www.westralianinsurance.com.au