Sadly, under insurance remains a common problem. But with judicious thought, consideration and discussion with your Broker it is not overly difficult to get right - so if the worst does happen you’ll need not worry.

Here are some basic tips:

Buildings. These are almost always insured on the basis of the cost of re-building as new. Allowance needs be made for demolition, complying with current regulations, roads paths and parking (if covered), surveyors and architects fees and inflation. If in doubt consult a local Chartered Surveyor who is versed in preparing insurance valuations.

Fixtures and Fittings. Ensure you maintain a full up to date itemised inventory, and that the cost of renewal is regularly reviewed. Be certain to agree with the Landlord which fixtures and fittings you are required to insure.

Machinery, Plant and All Other Contents. A current inventory is essential, detailing the cost of replacement as new (unless insured on an alternative basis of settlement). Do not forget to make allowance for delivery, installation and commissioning, as well as inflation and other legislation or changes which may affect equipment costs.

Stock. This should be valued in accordance with the policy definition (usually on a “cost” basis, extending to the expenses of work in progress if applicable). Make certain that seasonal variations are accounted for (many policies provide automatic seasonal uplifts). If you have consistently variable stock levels, then stock declaration policies may be available which allow for monthly declarations of value.

Remember - sums insured should be reviewed and updated whenever necessary and not just at renewal.

Business Interruption. Consider the maximum period you believe it would take for your business to fully recover from a devastating event and make allowance for that to happen on the last day of your policy. Ensure the figures allow for growth over the full period (declaration-linked cover provides for an uplift to this figure) and that the gross profit definition you use matches that of the policy.

The indemnity period insured is also of great importance for all forms of business interruption insurance, not least for rental income from owned property.