Insurance policies need to be adapted to meet UK building materials shortage
WITH a nationwide shortage of building materials significantly driving up costs of timber and steel, business owners need to ensure their insurance cover for rebuild costs reflects this change or face losing out if they ever need to claim.
This is the message from Chris Clement, the Commercial Director of H&H Insurance Brokers, who is warning people not to get caught out should they ever need to carry out rebuilding work, for instance after a fire or structural damage.
The UK is currently experiencing a huge shortage in building materials, largely down to disruptions caused by Covid-19 and partly due to imports following Brexit, and this has resulted in the prices of timber and steel rising rapidly month- on-month. It was reported that timber prices jumped by 23 per cent in September 2021, and are currently 64 per cent higher than July 2020.
Chris said that business owners need to make sure they have the right cover for rebuild costs for their agricultural or commercial buildings or run the risk of missing out on their full entitlement to a claim if they are underinsured.
He said: “The prices of products like timber and steel are often seeing double digit, month-on-month increases. Many business owners may not have considered how this would impact on their insurance and they run the risk of significantly losing out should they ever need to claim.
“If buildings are destroyed beyond repair through, for example, structural damage or a fire, then you really need to see what cover you have for rebuild costs - if the building materials have cost more to purchase, then the insurance needs to be able to cover the higher amount.
“This is where people can get caught out, and find the sum insured isn’t sufficient to cover the higher amount.”
Chris is also raising awareness of Business Interruption cover which can help business owners experiencing lengthy delays for their building materials to arrive. This policy covers the loss of income whilst waiting for the materials.
“If your rebuilding process is delayed for several months because of this delay, then how will you protect your income if your business is unable to trade for months, or in some cases, a number of years?” said Chris.
“Business Interruption covers this and it is certainly cover that all business owners need to consider. An insurance broker can work with you to help to choose the correct type of Business Interruption cover your business requires, how long payments are required for to assist in keeping your business running, and of course the amount these payments need to be.”
Business owners should seek the services of a surveyor to re-evaluate their buildings if the rebuild costs are going up, and then speak to their insurance broker to make sure the right cover is in place.