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Businesses Urged to Check Insurance Cover as Brexit Effect Bites


Towergate warns businesses that the drop in the pound could leave many underinsured. The financial market’s nervous reaction to the Brexit vote a year ago has led to the pound falling by around 15 per cent against the Euro.

This leaves businesses that import goods from overseas, priced in a foreign currency such as the Euro or Dollar, facing a far higher risk of being underinsured because the sum insured for those goods will be valued in Sterling.

Discovering the shortfall at the point of claiming for a loss can have a huge financial impact because the size of the claim settlement is likely to be reduced.  For example, in 2015 a company purchasing machinery or stock costing EUR250,000 needed to insure it for approximately £172,000.  Today that sum insured would need to be £217,000 – a hike of £45,000.

Underinsurance affects a number of UK businesses each year – if they are underinsured for either their physical assets or for the impact to business interruption, the size of any claim settlement is likely to be reduced.

Justin Newton, Managing Director of CCV Cardiff Insurance Brokers part of the Towergate Group said:

“Underinsurance can have a devastating effect on businesses if they need to make a claim, and business owners may not have considered this additional risk posed by the substantial fall in the value of the pound.

“During this period of volatility we would strongly urge businesses to check sums insured and limits of liability so that adequate cover is always in place.”

Here’s what Justin advises to avoid underinsurance:

  • Regularly review to keep asset sums insured in line with reality, the pound and inflation
  • Getting the numbers right when you buy your insurance policy will help avoid any inadequate sums insured becoming even less suitable year-on-year
  • Sums insured for buildings should be based on the cost of rebuilding not the market value – particular features of your premises might affect the cost of reconstruction
  • With business interruption cover, make sure your gross profit assessment matches the policy.  Accountants and insurers have different ways of measuring gross profit
  • If you buy a simple online package policy check that the liability limits of indemnity, business interruption indemnity periods and other standard policy limits are sufficient


At Towergate we take our time to understand your unique business and its specific requirements. We deal face-to-face with large corporations, organisations and SME’s with a local, regional, national and international footprint; businesses with complex needs requiring insurance programmes that are rarely a single product.

No matter what the size of your organisation, we will always adopt the same process to safeguard your business. We will sit down and discuss your company’s requirements with whoever we need to; the MD, the owner, the Finance Director; Health & Safety advisors; the company secretary, in-house Risk Manager or a combination of Senior Directors.

We truly believe in providing the personal touch, providing both local and national service. That’s why we have over 80 locations across the UK. Our proposition to you is underpinned by strong relationships with leading insurance partners, who in turn appreciate that we place our clients, at the centre of everything we do.

Having formed a historical presence in Wales, our Welsh offices continue to trade in Cardiff, Swansea, Barry, Bridgend, Tonypandy, Bargoed, Haverfordwest and Ammanford and form part of the Towergate Group. Formerly trading as Antur Insurance Services, CCV Cardiff, Morgan Brokers, Motaquote and Underwood Insurance Brokers our teams have a local knowledge and understanding of Welsh business practises.

As part of the Towergate Group, these business are backed by the one of the largest corporate and SME insurance brokers in the UK, which not only allows access to the general insurance market and Lloyds, but also to a number of bespoke and unique options, which can provide specific benefits for our clients.


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