Investing in Independent Pharmacies could leave you at risk.
You’ve invested £100,000 in re-fitting your Pharmacy, creating a space that reflects your dedication to health and wellbeing and serving the local community.
But have you updated your Shop Insurance policy to reflect this investment?
Consider this scenario:
- After spending £100,000 on improvements, a leak causes £40,000 in damages to your Pharmacy.
- Your Shop Insurance policy sum insured limit is set at £7,000 for Tenant Improvements.
- You are effectively underinsured by 82.5%, meaning your insurer is within their rights to settle your claim at £1,225
(17.5% of the sum insured rate).
This means you’d have to cover the remaining balance of £38,775 out of pocket.
Don’t let underinsurance put your business at risk. Contact Jensten today to review your shop insurance and ensure the protection of your Independent Pharmacies.
Understanding underinsurance
Underinsurance occurs when the insurance cover of a property or business is insufficient to cover the full value of a loss. In simple terms, if the cost to rebuild or replace your property and stock is higher than your insurance policy’s cover limit, you are underinsured.
Like our scenario above, this gap can lead to substantial out-of-pocket expenses in the event of a claim.
Causes of Underinsurance
There are several reasons why a business might find itself underinsured:
- Failure to Update Policies: One of the most common reasons for underinsurance is the failure to update insurance policies after making significant investments or changes to the property. For instance, after a major renovation or upgrade, many owners forget to inform their insurance broker of the increased value.
- Misunderstanding Policy Terms: Insurance policies can be complex, and business owners may not fully understand the extent of their cover or the value of their insured assets. This misunderstanding can lead to choosing lower cover limits that do not reflect the actual replacement cost.
- Inflation: Over time, the cost of materials, labour, and other expenses can increase due to inflation. If a policy isn’t reviewed and adjusted regularly, the cover limit might not keep pace with these rising costs, leading to underinsurance.
Cost-Cutting Measures: Whilst we appreciate the pressures Independent Pharmacies are under, an effort to reduce expenses, business owners might opt for lower cover limits. The reality is this might save you money in the short term, but it can leave you vulnerable in the event of a substantial claim.
Steps to Avoid Underinsurance: The role of Jensten Insurance Brokers
Talk to us… We specialise in providing a wide range of insurance solutions for pharmacies. With a deep understanding of the unique challenges faced by pharmacy owners, we offer tailored insurance policies designed to protect against the risk of underinsurance.
Underinsurance is avoidable, getting the right level of cover and know your sums insured
By working with Jensten, pharmacy owners can benefit from specialist advice from an experienced insurance team who can talk through your pharmacys’ needs, ask the right questions and get you the right cover.
Having the correct sum insured values in your policy may not cost as much as you think. Our advisors can work with you to find the right solutions.
Don’t leave your business exposed to the risks of underinsurance. Contact Jensten today to review your shop insurance and safeguard your investment.
