If your customer’s building is damaged or destroyed, it’s not just the immediate aftermath of the disaster that businesses need to consider, but also the long-term effects – how long will it take to rebuild the premises? Do the businesses have access to a secondary site?
Some major incidents can completely halt a business. In these cases, dealing with the damage is possible, but how long it takes is often influenced by how the building was constructed, its age and the internal systems that it uses.
“Post-recession, Zurich has seen that there has been an increase in rebuild costs,” says Paul Redington, Senior Claims Adjuster for Zurich. “With the green shoots of recovery, there has been a greater demand for building materials and labour, especially in London”.
This creates issues around underinsurance, with customers focusing on reducing costs rather than considering long-term complications. It’s critical that customers bear this in mind when it comes to pre-planning, to ensure that premises are adequately covered. Whether they’ve bought a new premise, extended an existing one, or are renting, business owners should always look at the adequacy of their coverage.
“We’re seeing higher claims costs because of the ways that new buildings are built. For example, partitions and dry linings within them absorb water, and costs can mount when you have to strip a building to dry it, or to simply locate the leak,” says Paul.
Such an incident would not just force customers to find an alternative location for their business, but also deal with the rising costs to repair their damaged premises.
Over 60% of brokers have found that commercial property, followed by landlord insurance, residential property and business interruption is most commonly undervalued
Insurance Times, 2015