The act of taking out a business insurance policy isn’t the end of the process, as it’s necessary to ensure that every area is insured to an adequate level.

Failure to do so could result in an insurer enforcing their underinsurance clause, resulting in the policy not responding to the levels that you may have anticipated.

Once you have the cover at a level that you are happy will be adequate to repair or replace your business assets It is also important to make sure that inflation hasn’t eroded your cover.


Buildings can be extremely costly to rebuild, a task that can be near impossible without an appropriate level of insurance cover. As such, property owners would be served well to ask a builder to gauge current rebuild costs, or to be truly certain, engage a property valuer to prepare a professional report of the cost of rebuilding.

This should be undertaken on a regular basis in order to maintain the most accurate information.

Other costs

Many people fail to consider that an adequate sum insured must also cater for the costs of demolition, removal and dumping and if asbestos is found, this could certainly add tens of thousands to the bottom line. Then there are the cost of professionals fees, the architects, surveyors, engineers etc all to be included.

Another consideration is what building requirements have been implemented by local, state or federal governments, be they for flood mitigation, fire codes, inclusion of disabled access or amenities etc….

Read your insurance documentation

Understanding the document that comes along with an insurance policy can be helpful when it comes to claim, and especially when researching what levels of cover must be held to not trigger underinsurance.

Carefully look over your product disclosure statement and policy documents to make sure you’re aware of all the key features and if you are still confused, seek guidance from a professional insurance broker.

By understanding the different areas where underinsurance can have an effect businesses can better prepare themselves for the unexpected.