Asset valuations for insurance purposes

Underinsurance occurs when the sum insured on a policy is lower than the actual reinstatement or replacement value of the assets covered. Most commercial insurance policies include an average clause, which means that if a business is underinsured, the insurer will reduce any claim payout in proportion to the shortfall.

For example, if a business holds £1m of plant and machinery but insures it for £500,000, and then suffers a partial loss of £250,000, the insurer may only pay £125,000, reflecting the 50 per cent underinsurance. The business bears the remaining £125,000 itself, regardless of the partial nature of the claim.

Regular, professionally prepared valuations are the most effective way to ensure declared values reflect current replacement costs. Asset values can change significantly over time as market conditions, supply chain factors, and inflation affect the cost of new equipment. A valuation that was accurate three years ago may not be today.

This page describes a professional valuation service for insurance purposes. It does not constitute insurance or legal advice. We recommend confirming your cover levels with your broker or insurer following any valuation.

• Avoid underinsurance – If your declared values fall below the true replacement cost, an average clause in your policy may reduce any payout significantly. An accurate valuation eliminates that risk.
• Support claims processing – A current, professionally prepared report gives your insurer clear documented evidence of asset values at the time of the policy, reducing the scope for disputes at the claims stage.
• Keep cover current – Asset values change with market conditions, inflation, and the cost of new equipment. Regular revaluations ensure your cover reflects the actual cost of replacing what you own.
• Meet insurer requirements – Many insurers require independent valuations for high-value or specialist assets. A report from a named, RICS-registered valuer satisfies most provider requirements.
• Plan confidently – Knowing your assets are properly covered allows you to focus on running the business without concern about gaps in your protection.

How do I arrange an asset valuation for insurance purposes?

Call 0333 200 2041, email [email protected], or complete the form further down this page. We will discuss your requirements and explain the process.

If you are happy to proceed, our chartered valuer visits your premises to carry out an on-site inspection. They will examine each asset individually, records its condition and specification, and photographs it for the report.

The resulting report sets out each asset, the basis of valuation, and the assessed value. Reports are prepared to a professional standard and are accepted by insurers and brokers across the sectors we serve.

We recommend reviewing valuations every two to three years, or sooner if there has been a significant change in your asset base or market conditions affecting replacement costs.