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Does Insurance Cover Increased Value of Stock? – The Impact Of High Prices On Your Insurance Needs

Jul 20, 2022

Prices are rising

There is no doubt about that. We are all feeling the impact. From individuals to businesses.

High fuel prices, the impact of the conflict in Ukraine, supply and demand issues, and rising inflation. All of these factors are affecting the prices of the goods that we buy.

But have you also thought about how this increase in prices may be impacting your insurance requirements?

Does insurance cover increased value of stock?

Most insurance policies set sum insured limits for the value of cover that they will provide – from the level of cover for building damage to cover for loss of stock and everything in between. And as the insured it will ultimately be your responsibility to set these sum insured levels on your policy, based on your understanding of your business.

And this is where we may start to see issues for businesses. Due to rising costs, what was previously a sufficient level of insurance, may no longer be adequate.

Whilst insurers use indexation (the amount that is used to increase the amount of insurance cover you have on an annual basis) to help combat the effects of inflation and under insurance, we do find ourselves in an unprecedented situation. And we believe that it has never been more important to ensure that you have the correct level of insurance in place to avoid finding your business in a position of underinsurance if you do come to claim.

Ensure you have the right level of insurance

Some areas to consider include

  • With building material costs rising, be mindful of cost inflation and consider whether you have enough cover to protect in the event of a loss or damage to your business premises
  • As a business you are most likely paying higher prices for the stock that you buy and sell on to your customers. So, it is likely that the value of the stock which your business holds has increased. Review your cover limits and ensure that you have enough insurance in place to cover any losses.
  • Think about your business interruption cover – shortages in the workforce and shortages of materials mean the length of time it is taking to get back up and running at pre loss levels are increasing. Have you realistically estimated the length of time your business operations could be disrupted for?

Work with an insurance broker

Take the time to review your insurance cover and the limits that your policies set.

Or even better (in our opinion)  work with an insurance broker who can help you understand the cover that you are buying as well as its benefits and limitations. Choosing the right insurance, whether you are an individual or a business, is not an easy thing for most. So why risk going it alone and potentially having insufficient cover in place?

Insurance brokers are experts in insurance and having an awareness of the risks of underinsurance means they can work on your behalf to ensure you have the right cover in place.

And another thing to be aware of – the market is seeing Directors bringing claims against fellow Directors in instances where inadequate insurance provisions have been put in place to protect the business against a loss. So, this is just another risk your business, or you personally, could face of not having the right insurance in place. And another reason why you could benefit from working with an insurance broker.

At Anthony Jones we are also calling on businesses not to cut back their insurance cover in the face of financial pressures. This will only ever be a short-term solution. Not having the correct type, or enough insurance in place ultimately causes much greater long-term problems if the worst should happen and you do suffer a loss.

If you are reviewing your business insurance, Anthony Jones may be able to help you manage your costs whilst also maintaining the right level of insurance cover. Get in touch with us on 020 8290 9080 or email us at business@anthonyjones.com. Remember – it costs nothing to work with Anthony Jones to arrange your insurance. We are paid by insurers when we place cover. So, if we don’t help you out, we do not earn anything.

Get a Quote

You can call us during normal office hours, Monday to Friday, 9am to 5pm. Outside of office hours you can either email us or leave an answerphone message and we promise to get back to you the next working day.

General enquiries:
020 8290 4560

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