During the Covid-19 crisis, we are following UK Government guidance to keep our employees safe and look after our valued clients. Read our articles on support for your business.

You can also help us help your fellow businesses - as well as your favourite charity - at this difficult time by recommending us to someone you feel would benefit from our insurance.

Re-ignighted focus on Brexit highlights underinsurance issues

Reignited focus on Brexit highlights underinsurance issues

Amidst the potential turmoil of another spike in infections from the coronavirus, the UK is facing the double whammy of its messy departure from the EU.

Towergate has highlighted on many occasions that underinsurance remains a serious problem affecting UK businesses. In essence, if a business owner is underinsured for either their physical assets or for the impact of business interruption, the size of any claim settlement is likely to be reduced.

Currency Fluctuations

Why could the effect of Brexit be the cause of underinsurance?

If you have imported or need to import a physical asset from overseas, which is priced in a foreign currency, but the sum insured for that asset is valued in sterling, then an adverse fluctuation in the exchange rate will mean that the sum insured is obsolete. As the asset has actually increased in value due to the currency in which it was purchased having risen, the sum insured needs to increase.

Similarly, many UK manufacturers import parts from abroad, as do wholesalers and suppliers of goods and services. It is therefore likely that some of their costs have risen, which they may choose to pass on making some UK goods and services more expensive. It is therefore important to comprehensively review ‘new for old’ replacement costs.

Business owners should keep a close eye on their sums insured and limits of liability to ensure cover remains adequate and to take into account the sort of substantive currency fluctuations which can occur in turbulent times.

Stockpiling and the insurance impact

Continued uncertainty over whether the UK and EU can reach a new trade deal has forced businesses to begin stockpiling goods, wary of the potential impact a no deal Brexit would have on their supply chain.

As the end of the year Brexit draws closer, the government is encouraging businesses to plan for every eventuality. Businesses are starting to run supply chain tests and fill their warehouses with essential goods and inventory to ensure they can manage in the worst-case scenario of high tariffs and hard borders.

Importantly, stockpiling can cause major concerns about the levels of insurance cover businesses have in the event of a claim.

When stockpiling it is crucial that business owners talk to their insurance broker to re-evaluate their insurance risk and increase the sums insured where necessary. Otherwise the insurance in place may not be sufficient to cover additional the stock in the event of a claim leading to significant financial loss.

If you are not sure what effect Brexit will have on your business in terms of insurance, contact your usual Towergate Insurance Brokers Advisor.

Read more Brexit articles from Towergate


Coronavirus (Covid-19) – Update for Towergate customers


During the COVID-19 Coronavirus crisis, we want to reassure our customers and partners that we are following UK Government guidance,
and as a result our national offices are closed to both safeguard the health of our employees and our ability to look after our valued clients.
Where possible, our employees are working from home and we are still fully able to support with renewals, new cover requirements and
claims guidance and support. This includes giving our colleagues the ability to work from home or alternative locations,
which we hope will limit the disruption and enable you to speak to us for advice and support should you need it.
Read more