If you’re a UK business owner searching for a commercial insurance review, there’s a good chance your current policy no longer reflects your business.
Underinsurance within business insurance is a common problem that UK SMEs face and can end up being a costly problem. It can happen when your business grows, changes or diversifies and your insurance policy isn’t reviewed and stays the same.
If you haven’t had a business insurance review in the last 12 months, the cover you currently have may not be fit for purpose anymore.
According to the Federation of Small Businesses, millions of UK small firms are currently insured for a version of themselves that no longer exists. They’ve grown, taken on staff, added services, and changed how they operate, but their commercial insurance policy still reflects who they were when they first started up. That gap, which causes no issues until you need to make a claim, could affect your business significantly.
Why Business Insurance Gaps Happen?
Over time, your business is more than likely to evolve. Where you were 12 months ago could be very different to where you are now. You take on a subcontractor to help with a busy period. You start offering a new service alongside your original one. Your turnover grows. You move to bigger premises, or your team starts working from home. You hire your first employee, or your fifth.
Over time, things change in ways that may not feel significant enough to flag to your insurer.
None of these feel like “insurance events.” But each one can shift your risk profile in ways your current commercial insurance policy may not cover. Underinsurance can happen through growth, not negligence.
The 5 Business Changes That Most Commonly Create Commercial Insurance Gaps
1. Adding New Services or Products
If your business has expanded what it offers, your business insurance policy needs to reflect that. A policy written for a consultancy doesn’t automatically cover you if you’ve started selling physical products. A policy for a sole trader doesn’t stretch to cover a team of five without being updated.
2. Taking On Subcontractors
Subcontractor liability is one of the most misunderstood areas in UK business insurance. Many business owners assume that hiring a subcontractor transfers liability to them. In many cases, it doesn’t. If a subcontractor causes damage or injury while working on your behalf, the claim can still land with you. Your commercial insurance policy needs to account for this explicitly.
3. Growth in Turnover or Stock Value
Many business insurance policies are written based on your turnover or the value of your stock and equipment at the time. If those figures have increased and you haven’t updated your cover, you could be caught by the “average clause,” which means your insurer pays out only a proportion of your claim, in line with the proportion of your actual value that was insured.
A £500,000 claim on a policy written for a £250,000 business doesn’t pay out £500,000. This is a critical underinsurance risk that a commercial insurance review will identify.
4. New Locations or Remote Working
If your team now works from home, or you’ve opened a second location, your original business insurance policy may not extend to cover those premises, the equipment in them, or the liability that comes with them. Hybrid working has created a significant commercial insurance blind spot for UK SMEs that many haven’t addressed.
5. Rising Rebuild Costs
Rebuild costs have risen sharply due to inflation and supply chain pressures. If your commercial property insurance was set based on a rebuild value from several years ago, it may no longer reflect what it would actually cost to rebuild today. That shortfall comes out of your pocket, not your insurer’s. Getting an up-to-date commercial property insurance valuation can be one of the most important steps in any business insurance review.
Business Insurance Renewal Is Not the Same as a Business Insurance Review
This is the distinction that catches UK businesses out most often. Renewing your business insurance policy each year feels like you’re keeping things up to date. But renewal is simply continuing what you already have, often with an automatic price adjustment. It isn’t a review of whether your commercial insurance cover still fits your business.
A proper business insurance review means someone actually asking the right questions. What has changed in your business this year? Have you taken on new staff, new services, or new contracts? Has your turnover grown? Have you made significant purchases? Are you working from new locations?
What a Commercial Insurance Broker Sees That an Online Form Doesn’t
There are some types of business insurance you can purchase online, such as public liability insurance. Usually, they are standardised questions and don’t often ask follow-up questions. The policy will be based on your knowledge of your business and insurance.
This could lead to gaps in cover. You may have missed potential risks that your business faces, assume some areas of your business are covered in one section where it may not be or know a certain type of cover exists.
As a commercial insurance broker, we work with UK businesses across a wide range of sectors. We’ve seen the claims that happen when business insurance cover doesn’t match the business. We know the questions to ask, we take the time to learn about your business and industry. With excellent relationships with our insurers, we will speak to them on your behalf to discuss the levels of cover that you require and ask for their support in finding a tailored solution for you.
Additionally, there are some business insurance policies that you can’t purchase online. For example, a commercial combined policy or a Directors and Officers policy isn’t something you’re not likely to purchase online. The complexity around these policies can be difficult to understand but that’s where an insurance broker like ourselves steps in.
The Question Every UK Business Owner Should Ask Right Now
Think about your business today compared to when you last had a proper commercial insurance review. Has anything changed? New services, new staff, new premises, new contracts, higher turnover, different ways of working?
If the answer is yes, your business insurance policy may no longer reflect your actual risk. The best time to address a business insurance gap is before a claim, not after.
Book a Commercial Insurance Review with Portal Broking Group
Portal Broking Group is an experienced commercial insurance brokers helping UK businesses make sure their cover reflects who they actually are today, not who they were when they first took out a policy.
If you’d like a straightforward business insurance review, get in touch. Don’t hesitate to get in touch with us on 01829 706436 or email info@portalinsurance.co.uk