Underinsurance For Business is Still a Problem, Says Towergate

In business it’s all too easy to underestimate the value of assets, stock, fixtures, electricals etc;

Towergate Insurance, part of the Ardonagh Advisory insurance platform, is warning that UK businesses could face serious financial consequences due to widespread underinsurance, caused not just by rising costs, but by a fundamental lack of knowledge about how insurance policies should be structured and maintained.

In a recent poll conducted by Towergate Insurance, 40% of respondents cited a lack of insurance knowledge as the most likely factor to cause their business to be underinsured this year. This outpaced other key risks such as failure to regularly review policies (35%) and rising material costs (19%), while operational changes were flagged by just 7%.

The findings come at a time of ongoing economic volatility, with businesses continuing to navigate inflationary pressures, shifting supply chains, and evolving working models. But the survey highlights that practical knowledge gaps, rather than external market conditions, could be the biggest driver of costly underinsurance issues.

Johnny Thomson, from RebuildCostASSESSMENT.com, also part of Ardonagh Advisory, said:  “Underinsurance often isn’t about what’s happening in the wider economy, it’s about what businesses don’t know. Too many companies are relying on outdated valuations or assuming their insurance will automatically reflect changes in materials, labour, or rebuild costs. That’s simply not the case. Without the right knowledge and regular professional reviews, many businesses are only finding out they’re underinsured when it’s too late.”

Towergate Insurance is urging businesses of all sizes to prioritise education, schedule regular policy reviews, and seek expert reassessments of building, asset and business interruption values to ensure cover remains adequate in 2025 and beyond.

“Underinsurance is often invisible until disaster strikes,” said a Towergate spokesperson. “Whether it’s fire, flood or a major claim, businesses need to know their insurance won’t just protect them in theory, it has to work in practice. And that starts with knowledge.”

With underinsurance claims potentially leading to significant out-of-pocket losses, cashflow disruption, or even business closure, Towergate is calling on business leaders to treat insurance planning as a critical strategic priority.