Common Under-insurance Traps

  • Underestimating the reinstatement cost of buildings (not allowing for the increasing costs of rebuilding and the additional costs of new buildings, heritage issues, etc)
  • Not allowing for architectural and engineering fees when setting the building sum to insure (such advice may be required if the building needs to be rebuilt following a loss)
  • Underestimating the replacement cost of plant and machinery
  • Underestimating the costs associated with removing debris (even $100,000 doesn’t go far where there are contamination issues like asbestos roofing or damaged stock with special disposal requirements)
  • Keeping values and sums insured up to date year after year
  • Having no business interruption insurance
  • Setting inadequate indemnity periods for business interruption insurance and not having additional increased cost of working cover.

PSC Insurance Group has access to resources that can assist in ensuring you are not under-insured.   In many situations we can also negotiate with insurers to remove under-insurance penalties from policy wordings when you have insured property for its full value as stated in a current valuation.