Marriott & Co. regularly conduct corporate valuations for insurance purposes, for major FTSE and SME clients.
Insurers expect that all business assets are insured for their full current replacement cost. In the event that the values declared are less than the full replacement cost of the assets, insurers will likely trigger their ‘average’ or co-insurance clause resulting in a claim settlement being reduced proportionately (50% in the illustration below):
|Sum Insured (declared Value)||£1,000,000
|Actual replacement cost||£2,000,000
|Claim for replacement cost following partial loss||£500,000
|Settlement @ 50% (assuming average or co-insurance applied)||£250,000
The above illustrates that if the business assets are half insured, then Insurers will settle only half the claim – and the business will need to find £250,000 from its own resources to replace the remaining lost assets.
Recent extreme weather events are a reminder of the potential devastation that can be compounded by under-insurance. The consequences of inadequate insurance cover can be devastating and could even cause the business to close. Insuring for the full value is probably not much more expensive, and advising the correct sums insured is a professional service that Marriott & Co. provides.
Our insurance valuation service includes:
1. Reviewing the insurance policy;
2. Determining the ownership and insurance responsibility of the plant and equipment, buildings and tenant’s improvements;
3. Carrying out a full site survey of all the plant and equipment and other chattel contents, and identifying any nebulous services;
4. Preparing an inventory and valuation report that includes the cost of complying with the Public Authorities clause and an allowance for debris removal costs;
5. Declared value recommendation;
6. Annual reviews.
If your business has any concerns regarding declared values, Marriott & Co. would welcome the opportunity to take the responsibility for advising the correct level.
Please do not hesitate to contact us if a discussion would be appropriate and helpful.
To discuss your valuation requirements or to chat through any related matters with a member of the friendly Marriott & Co. valuations team please call 01252 712 083 or click here.