UK businesses urged to review levels of cover

It is warning that record numbers of businesses could find themselves underinsured in 2011, with potentially significant consequences should they need to make a claim.

The research identified that many UK companies may be ‘unknowingly underinsured' with a third (34%) of business decision makers unsure if their insurance would cover everything should they need to make a claim. Comparatively, 11% admit they are either knowingly underinsured or ‘don't care' if they don't have enough insurance, as they doubt they'll need it.

Andrew Torrance, chief executive of Allianz Insurance, said: "We are urging companies to consider the risk to their businesses of being underinsured, as it can end up costing much more in the long run. The current precarious economic climate makes it even more important to have the right level of cover."

Mr Torrance said that he was encouraged that some businesses are re-evaluating their insurance needs, with almost a quarter (23%) of those questioned planning to increase their level of insurance cover in 2011. Yet with 71% planning to keep their level of insurance the same and 6% planning to reduce their level of insurance next year, Allianz Insurance is warning that in 2011, record numbers of businesses could be underinsured.

The research found that the main reason for cutting levels of insurance would be cost driven (69%). The top three insurance products that businesses would cut back on are:

  • Legal protection (31%)
  • Commercial vehicle insurance (28%)
  • Property insurance (21%)
Andrew Torrance said: "One in six business decision makers (14%) said that if they have to make further cuts due to the Comprehensive Spending Review, it will be insurance spend that's sacrificed which will only exacerbate this problem further. We are encouraging businesses to speak to their insurance provider about their specific needs to ensure they have adequate insurance protection in place."