As you may have seen in the news in the last few weeks, the devastating fire at a self-storage facility in Croydon destroyed the possessions of hundreds of people and left them severely out of pocket. The standard insurance policy with Shurgard reportedly paid £2,000 per unit damaged which is unlikely to be enough to compensate those whose lives and businesses have been affected. So what can we learn from this?
Whilst a warehouse fire is much different to that of a funeral home in terms of scale, the principles of having your assets adequately protected so you can bounce back in the event of loss are exactly the same. So that you are not left feeling the financial effects of a substantial loss, we recommend you:
Check your sums insured regularly and update accordingly
It’s a conversation we have often with our customers when they say that “my limits are fine”. It’s not until we ask the customer to think of the worst case scenario, such as a fire, for example, that we often get the response of “the cover needs changing” because they’ve either failed to take into consideration new equipment, the new carpet installation or have simply failed to recognise gradual improvements made to their business over a period of time.
It is extremely important, therefore, to check your sums insured regularly. If you have had a recent refurbishment and you now have more contents than you did previously, please ask your insurance representatives to get your cover increased. Ensuring your contents are insured at the right level will also protect you from the condition of average being applied to your claim in the event of loss. If you are found to be underinsured, your claim will be reduced proportionate to the level of underinsurance in play so it is key to ensure that you have assessed your risk and insured it correctly.
As a starting point, ask: “What would the insurer cheque need to have written on it if I was to put everything back in from new?” Regarding stock, allow for seasonal increases in demand and ask yourself what stock you would need to keep in reserve at your busiest times. Your stock sums insured needs will need to reflect these busy periods.
Maintain an itemised list
Some of you may benefit from an itemised list. To assist you in knowing what your level of contents and stock cover should be at any one given time, keeping a running log of substantial items and retaining purchase receipts may help you to keep up to date with your sums insured. Keeping this record will also help speed up the claims process, as you are able to quickly identify items that were on site before loss and have the proof of purchase required by insurers for those items when they need them.
I hope this advice is useful to help you ensure that you and your business are correctly covered. Please speak to your insurance advisors if you think you might be underinsured, or if you have any other queries relating to your insurance covers. If I am able to offer any further independent advice, please do not hesitate to contact me on 0208 256 4927.