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Protect our SMEs from Underinsurance Risks, Says Cardiff Insurance Brokers Towergate


Written by Towergate Insurance – for more information contact them here.

Towergate Insurance in Cardiff has joined an industry-wide push to warn SME owners that they could be at risk of underinsurance.

The issue could affect up to 80% of business owners, who could receive far less than they need to restore their business when they need to make a claim, leading to potentially devastating results.

Towergate is today issuing advice for business owners who could have false confidence in their policies, highlighting issues such as the absence of business interruption cover or up-to-date risks like cyber attacks.

“An alarming degree of underinsurance”

According to a study conducted by the Building Cost Information Service, part of the Royal Institution of Chartered Surveyors, up to 80% of small businesses in the UK could be without adequate cover.

The Financial Conduct Authority’s study in claims made by SMEs * found what it termed a “significant number of instances” of cover being too low. Some 20% of the claims over £5000 which it examined did not provide enough cover for the actual loss the business had suffered.

The British Insurance Brokers Association has described the situation “an alarming degree of underinsurance.”

Commercial property owners are also thought to be underestimating the cover they require by a considerable amount. A study of underinsured businesses in 2015 revealed that more than four out of five underinsured their commercial property by an average of £486,000. **

Meanwhile government has found that only 37% of businesses have some form of cyber security insurance ***, despite the fact that two-thirds of large UK businesses had been hit by a cyber breach or attack in the past year. The average cost of a cyber attack to a business with more than 250 employees in the UK is some £36,500 with the most severe attacks costing millions. For smaller businesses of between 50 and 249 staff, the average cost of a cyber breach was £847

Advice from Towergate

Worried you’re underinsured? Towergate has issued these five pieces of essential advice for SMEs on how to protect themselves from risk.

  • Get your business assets valued by a professional appraiser
    It costs more to pay for a formal evaluation, but it’s crucial to get rid of any room for mistakes on your policy. Towergate Insurance Brokers can assist with introductions to a professional valuation company.
  • Check your insurance policy is up to date – especially if your property has been altered
    Make sure your premises is insured for its full up-to-date sum of a rebuild cost, not its original market value.
  • Account for any extra fees for reinstatement
    This includes paying architects and planning experts, site clearance, or the need for heavy plant machinery.
  • Remember to update the total worth of your asset
    If you have higher stock levels, new equipment or additional locations since you began trading, be sure this is added to your policy.
  • Review your existing business interruption cover and ensure you discuss adding this cover urgently, should you not have any
    One in five SMEs surveyed said they had problems getting back to normal business trading after a disruption, but fewer than a third had business interruption cover.* Factoring in planning permission, rebuild time, sourcing specialist equipment and the time it takes to win back customers, Towergate recommends business interruption cover of at least 24 months.

“As one of the biggest corporate and SME insurance brokers in the UK, we understand the devastating consequences an inadequate policy can have on an SME,” says Gary Stevens “If you’re not sure if your existing insurance covers all your assets, we can recommend professional valuation experts and help you take stock through our trusted local team and network of experts.”


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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