In Focus: Risk managing underinsurance

In part three of our series Sam Barrett explores what brokers can do to ensure SMEs are insured to the right level.

Underinsurance is a major issue in the SME market, with estimates suggesting that anything from 40% to 70% of buildings aren't insured for the full reinstatement value. But where the sum insured is inadequate, it can have serious repercussions for the business owner.

Where underinsurance comes to light on a loss, insurers can apply a proportionate remedy, asking for additional premium, imposing different policy terms or reducing the claim payment.

"It's a serious issue when a business owner has