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Impact of Brexit on Sums Insured

It is important for businesses to understand the impact of the weakening pound on their insurance sums insured.

Written by Kieren Rai on 21st October 2016

Impact of Brexit on Sums Insured

It is important for businesses to understand the impact of the weakening pound on their insurance sums insured.

Many businesses import machinery and stock from overseas, priced in Euros, Dollars and Yen, whilst the Sums Insured on their insurance policy are shown in pounds sterling.

For example, if the new replacement value of a machine is €500,000, and was previously insured at circa £385,000, it will now need to be insured at a figure of £446,000 to avoid under insurance in the event of a loss. The changing value of the currency, pre Brexit to date, requires a minimum 16% uplift of the sum insured.

Also many businesses operate abroad and are contractually required to insure their liabilities to a limit set out in a different currency - again this may need to be reviewed.

This highlights the need to keep a close eye on sums insured and limits of indemnity, to make sure cover remains adequate, to cater for significant sterling fluctuations.

If you wish to speak to one of our expert advisors on this subject, please visit http://www.franklands.co.uk/

See other blogs related to: Brexit

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