Business Under-Insurance in Ireland: Is Your Company at Risk?

Under-insurance is a growing concern for Irish businesses. Despite its importance, many companies overlook the risks, leaving themselves exposed to significant financial losses. We explore under-insurance, its implications, and how you can safeguard your business with tailored advice from Dolmen Insurance.

What Is Under-Insurance?

Under-insurance occurs when a business’s insurance policy does not fully cover its assets or liabilities. This means the coverage is insufficient to protect the company against potential losses.

For example, if a business is insured for €100,000 but the actual value of its assets is €200,000, only a portion of any claim will be paid. The remainder will need to be absorbed by the business, often with devastating consequences.

Why Is Under-Insurance a Concern for Irish Businesses?

In Ireland, rising costs, inflation, and a challenging economic environment have exacerbated the problem of under-insurance. Many businesses fail to regularly update their policies, leading to coverage gaps. Additionally, misunderstandings about policy terms and valuations often result in insufficient coverage.

With the Irish economy evolving rapidly, failing to adjust your insurance can leave your business at risk. Local legislation and unique market dynamics require tailored advice to ensure comprehensive coverage.

What Might Happen in the Event of Under-Insurance?

The consequences of under-insurance can be severe, including:

1. Reduced Claim Payments: Insurers may apply the “average clause,” reducing payouts proportionally based on the level of under-insurance.
2. Operational Disruptions: Insufficient funds after a loss could leave a business unable to recover or reopen.
3. Increased Financial Strain: Companies may need to cover the shortfall themselves, potentially leading to insolvency.

Example:
Imagine a retail business valued at €500,000 but insured for only €250,000. In the event of a €100,000 claim, the insurer might pay only €50,000, leaving the business to cover the remaining €50,000.

How to Prevent Under-Insurance

To avoid under-insurance, businesses must work with an experienced broker who understands their needs. Here’s what to expect:

• Accurate Valuations: Regular assessments ensure your assets and liabilities are correctly valued.
• Tailored Coverage: Policies should reflect your specific risks and operational requirements.
• Proactive Reviews: Annual policy reviews help adjust coverage based on changes in the business environment.

Why Choose Dolmen Insurance?

As an Irish-owned and operated company, Dolmen Insurance provides unparalleled expertise in protecting businesses across Ireland. Here’s why you should choose us:

1. Tailored Coverage: We help you avoid paying for unnecessary cover while ensuring your business is fully protected.
2. Expert Advice: Our deep understanding of Irish legislation and market dynamics ensures your policy meets all regulatory requirements.
3. Personal Service: Unlike many in the industry, we assign you a dedicated business insurance expert with a direct line for support.

Under-insurance poses a significant risk to Irish businesses, but with proactive planning, it’s a risk you can avoid. Partnering with an experienced, Irish-owned broker like Dolmen Insurance ensures your company is fully protected, leaving you free to focus on what matters most—growing your business.

Contact Dolmen Insurance today for a comprehensive review of your business insurance needs. Call us at  01-8672121 or visit www.dolmen.ie to learn more.