During the festive period retailers are often caught out when making a claim as in preparation for big shopping days the stock levels in their premises are increased to cater for the demand that the season brings.
This can be troublesome should the worst happen as most policies do not cater for this increase and the policyholder can be left underinsured.
What’s the worst that can happen?
The implications of underinsurance in the event of claim can be severe as insurers will only cover you for the proportion of the total value of your goods that you have insured. For Instance, should you have insured your stock for £25,000.00 but at the time of the loss your stock level is at £50,000.00 then insurers will only consider paying 50% of the claim, based on what is called the ‘average clause’.
How can I avoid this occurring?
Make sure you let your insurer know about any changes to your business. Remember that some changes to your business might not just relate to contents or building insurance. If you have, for example, bought specialist equipment that takes time to replace, this will impact the amount of time it might take for you to get back on your feet after say, a flood. Therefore this might impact the amount of business interruption insurance you need.
Isn’t there provision for this in my policy?
While some insurers do offer seasonal stock increase cover as standard within their policy wording, this is by no means across the board. Carefully check your policy to see if this is factored in and if not, consult your insurers to ensure that sufficient cover is in place.
If you require any further assistance, please do not hesitate to contact us on 01253 764294 or by email at firstname.lastname@example.org .