A survey by chartered surveyor Jones Melling found that 90% of commercial properties were underinsured
Nine out of 10 commercial properties surveyed have an inadequate level of buildings insurance in place.
The survey by chartered surveyor Jones Melling found that companies were leaving themselves open to significant repair costs.
The report also revealed that the number of building evaluation Reinstatement Cost Assessments (RCA) carried out by the firm had risen by 700% in the past month, compared with requests made in the previous 12 months.
Chartered building surveyor and director Gary Melling said in the first eight months of the year the number of assessments had fallen significantly, owing to businesses viewing it as an unnecessary expense.
But this changed dramatically in the third quarter of 2013 across all sectors and regions, as companies renewed their buildings insurance.
The RCAs are undertaken when the cost of rebuilding or reinstating a property that has suffered damage or loss is being calculated.
They take into account construction costs, economic trends and professional fees to identify the correct level of buildings insurance required, to avoid costly overestimating, which can result in higher premiums.
Melling added: “While RCAs can lead to a potential hike in insurance premiums, in the long term the cost of having appropriate buildings cover will be far less than the rebuild and repair costs that could hit companies at any time, should they be underinsured.
“And therefore, this will leave them to pick up the difference between the insurance cover and the rebuild cost itself.”
Hines Chartered Insurance Brokers development manager Chris Booth added: “Property values can fluctuate over time due to market forces, as well as the refurbishment of and/or extension to a property. Therefore, it’s essential that the correct value is being used to calculate the relevant buildings insurance premium.
“The latest statistics show that due to a number of factors, many businesses are forgetting to have this value reviewed. Regardless of the economic climate, it’s important to carry out RCAs on a three-yearly basis to ensure the building is adequately covered in case of significant damage or loss.”