At a glance
- We've partnered with Insurance Business to bring you a series of 12 SME articles
- Many SME’s don’t review the potential changes in their sum insured regularly causing widespread underinsurance
- Pauline White, Zurich Underwriting Analyst talks to Insurance Business about this challenge
There is a trend for underinsurance in SMEs across the board, as SME’s often don’t review the potential changes in their sum insured regularly.
In an interview with Insurance Business, Pauline White, Zurich Underwriting Analyst talks about the importance of having adequate sum insured.
Pauline says “the right sum insured means that at the time of loss the insurer can fully reinstate you and get you back to the trading position before your loss. If your customers sums insured are too low, that may not be possible.”
While underinsurance can have a serious impact on customers, potentially leading to reduced claims settlements and overall financial loss, brokers have reason to be concerned too. In cases of significant underinsurance, brokers could face the possibility of policyholders seeking to claim the shortfall, or even raise the issue of negligent advice.
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