Marine Trade buildings insurance

By James Nicholas New Business Marine Account Executive

Isometric illustration of a boat docked at a seaside cafe with orange roofs, two large lifebuoys, and outdoor seating on a wooden deck.

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Are you fully protected?

Whether it’s a marina, boatyard, boat builder, boat repairer centre or marine equipment supplier that is operating from a premises that requires buildings insurance as part of your Marine Trade cover, it’s important to ensure you are protected correctly for those unexpected events. This advice piece, by James Nicholas, New Business Executive at Haven Knox-Johnston Commercial, highlights an exposure of underinsurance for the buildings section, and if not correctly insured, could seriously put the business in danger. Learn how to be protected and what precautions you should take.

Are your buildings sums insured adequate?

Barrett, Corp and Harrington a Howden approved partner conducted 3,667 building surveys and identified 69% are underinsured in 2023. We highly recommend reviewing your policy regularly to make sure it will protect your property in the event of a claim.

What should you consider when calculating a sum insured for your building?

In most commercial insurance policies, the buildings section is covered on a reinstatement basis. Reinstatement cover is to protect you for the full repair or rebuild costs if your property was damaged or destroyed to put you back in the position prior to your loss.

When you calculate the sum insured you should consider debris removal costs, professional fees such as architects, consultants, quantity surveyors and the building work costs to return the property to its original state. Factors to also consider include where the property is located and whether your property is grade listed, which could mean the sum insured should be increased due to extra rebuild complexity.

What would happen in the case of an underinsured claim?

The best way to explain this is through an example:

An Office & Chandlery building insured for £250,000 is destroyed due to an electrical fire. The insurers loss adjuster visits and advises it will cost £500,000 to return to its original state. In this scenario, you would be 50% underinsured which would trigger an underinsurance clause known as ‘law of average’. In a claim settlement, the insurers would probably settle at 50% of the sum insured for which you would receive £125,000.

Additional costs after settlement would be your responsibility. This shows why reviewing your sum insured is vitally important. A simple oversight of declared value could cause a major problem for your business, possibly even closure, so be proactive and act before it’s too late.

What actions should I take?

Review your insurance policy and think to yourself, how did I calculate the sum insured value for my buildings? When was the last time I had my property valued professionally? Have I discussed this with my insurance broker at point of renewal? Review your insurance requirements with your broker to make sure you are well protected if a claim ever arises.

If you would like to speak to our marine insurance specialists to make sure your insurance programme is tailored to your needs, contact 01905 930 760 or email us at hello@havenkjcommercial.com

Marine trade insurance, expertly navigated

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Haven Knox-Johnston Commercial is a trading name of Howden UK Brokers Limited, which is authorised and regulated by the Financial Conduct Authority No. 307663. Registered in England and Wales under company registration number 02831010. Registered Office: One Creechurch Place, London EC3A 5AF. Calls may be monitored and recorded for quality assurance purposes

Marine Trade buildings insurance

Are you fully protected?

Are your buildings sums insured adequate?

What should you consider when calculating a sum insured for your building?

What would happen in the case of an underinsured claim?

What actions should I take?

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