With businesses stocking up for Christmas, you must ensure your increased stock levels are correctly insured.
As the hospitality and retail sectors gear up for one of the busiest times of the year, it’s essential to check your insurance policies.
Here we look at the risks of underinsurance and how you can protect your business by protecting your stock.
What Does Business Stock Insurance Cover?
As the festive season approaches, it often means an increase in supplies for the hospitality and retail industries.
Business stock insurance offers peace of mind that the cost of replacing stock would be covered if something unexpected happened.
Would all your extra items be protected from accidental damage or theft at this time of year? Storm damage, water damage from frozen pipes, and fires are also real risks during the cold winter months.
Speak to Your Broker
You should speak to your broker to understand what type of stock insurance you have.
Some owners may find their insurers automatically increase the contents sums insured during typical busier periods such as Christmas. Still, not all policies or insurers are the same.
Suppose your stock insurance does not include seasonal increases. In that case, you should arrange increased stock cover on a maximum amount at-risk basis. This will be worked out on the time stock levels are at the highest and would cover a complete loss of all stock should you need to replace it.
Does your insurance allow for increased stock levels at busier times? Is there a single-article limit?
It’s vital to ensure you have the correct measures in place if your goods are stolen or damaged. Your broker can help you protect your livelihood.
What is Underinsurance?
Underinsurance is an insufficient insurance policy that leaves the policyholder exposed and responsible for covering losses.
Why is the Correct Cover Important?
Knowing how much to be covered for is essential, especially at Christmas, so your insurer can pay out the correct amount to replace it.
Should your Christmas stock levels exceed the limit stated in your policy, you may be underinsured.
Owners should calculate the precise value based on the replacement cost from suppliers. Consider stock checks and valuations to ensure a realistic stock record, especially for high-risk items.
Failing to accurately estimate supplies without factoring in a significant increase in your usual stock levels could leave you underinsured.
Who is Affected?
Taking extra Christmas stock into consideration is vital for many retail businesses reviewing their insurance policies.
However, it’s not only the retail industry that must be aware of the risks attached to increased stock levels and underinsurance.
Hotels, restaurants, butchers, cafés, pubs, coffee shops and bars can also store thousands of pounds worth of extra food and stock on-site during the festive season.
Hospitality businesses should also ensure insurance cover is adequate and will replace increased supplies in case of any unwelcome surprises.
How Much Will Stock Insurance Cost?
Your insurer will consider the amount of stock you need to insure and the total value of your items.
They will also factor in the business location, any previous claims, security at the property, and the history of the premises, such as previous flooding incidents.
Stock insurance can be added to business premises insurance or a business contents policy, while other businesses may have stock insurance as a standalone policy.
Contact your broker today to see how you can best protect your stock and business.
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