Many Australian businesses may be underinsured when it comes to their physical assets. Outdated valuations, inaccurate assessments, and fluctuating market conditions can leave businesses vulnerable to significant financial risk in the event of loss or damage.
As part of a preliminary analysis, Lockton reviewed the coverage of 12 major organisations and found that over 50% were underinsured. This small-scale analysis has highlighted a potential trend that warranted further investigation on a larger scale.
It’s crucial for businesses to regularly review and update their insurance policies to ensure they have the right protection in place against potential risks.
Why care about declaring the correct insurable value?
Regular valuations help you declare accurate insured values, so you can identify if you are underinsured or overinsured.
What it means to be over-insured
Overvaluation means your organisation is insured for more than necessary, leading to higher premiums.
What it means to be under-insured
Undervaluation means your organisation is insured for less than needed in the event of a claim, leaving you financially exposed.
The benefits of getting valuations right for your business
Reduce financial risk for stakeholders and directors
Stay compliant and avoid regulatory pitfalls
Prevent costly co-insurance penalties from underinsurance
Ensure your assets are fully covered with the right sums insured
Secure the right reinstatement cover to minimise downtime and recover faster
Need more guidance?
Our valuation team provides expert insights across industries, from sole proprietors to multinational corporations. With extensive local and international experience, we deliver independent, accurate valuations to help businesses safeguard their assets. You can engage with our team today to schedule a complimentary valuation of your assets.
Download our report for more insights (on the right for desktop users and at the bottom for mobile users).
The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.
