How much to rebuild your building?

Catastrophe can strike at any time

If your premises burnt down or were flooded where would your business be? 

Could you move out and continue elsewhere as if nothing had happened?

Would you have to stay and put it right?

If you own the premises could you afford to fix them or would your business be destroyed?  Even worse, would you still have to pay-off a loan on them?

Whether we like it or not, buildings insurance is a necessary evil.  We cough-up each year for something that might never happen.

It’s tempting to skimp on the premium to save a few pounds but to under insure could be a nightmare.  When disaster strikes the Loss Adjuster (note the word ‘Adjuster’) will be out to limit the insurer’s liability.  If you’re 20% under insured they will pay out 20% less than you need; then where do you fund the shortfall from?

If you’re over insured you will be paying too much.  That’s safer than being under insured but you’ll be paying too much year-on-year.

Who knows what the right sum to insure for is anyway?  Don’t trust your broker to get it right.  What does he know about rebuild costs anyway?

Don’t be misled by the price you paid for the property.  Commercial value is measured by the use to which it can be put, its location and possibly the condition it’s in. And the price will include the land.

The cost to re-build is completely different.  That will depend on the size, design and materials used.  The rebuild cost is often hugely disproportional to the market value, a common problem where historic or iconic buildings are used for normal commercial uses.

Chartered Quantity Surveyors are experts in building costs.  They can help you get it right so you don’t pay too much or too little.  And, when the Loss Adjuster comes trying to reduce the pay-out, a QS is well placed to fight your corner to make sure you don’t lose out.

Leave a Reply

You must be logged in to post a comment.