scout hut
14 April 2022

Is your Scout or charity building underinsured?

updated 9 August 2022

When it comes to calculating your sums insured for the purpose of your buildings insurance policy, you need to provide a realistic estimate as to how much it would cost to replace or rebuild everything from the ground up.

Due to a strain on supply chains, the costs of goods and materials are in short supply and labour is much harder to source post-Brexit. This has pushed the cost up of construction significantly, which means that the amount to rebuild your commercial property may now be much higher than you think. Between July 2020 and July 2021, the cost of materials rose by 20%, according to the Office for National Statistics (ONS).

How does underinsurance affect you?

For property owners or anyone responsible for insuring a building, insurance offers a crucial safety net, protecting property assets against unforeseen events. The purpose of this is to cover the cost of repairs or rebuilding work after an insured event like fire or flood. If there is a gap between how much your property is insured for and how much it will realistically cost to rebuild it, this could have a significant financial impact should you need to make a claim.

If you’ve underinsured by half, then any partial claims you want to make on your building policy will be half as well, meaning you’ll have to make up the shortfall yourself.

Due to the continued rise in construction costs, properties which are already underinsured may find that they are further off the true rebuild cost once these costs have been factored in. 

It’s worth getting your calculations right from the outset, so this doesn’t happen.

Avoiding underinsurance

We recommend that you should get the rebuild cost of your property confirmed by a professional valuation service provided by a suitably qualified valuer, surveyor, or builder at least every 3 years.

For Scout and Girlguiding premises insured on our Property and Equipment policy, we can also provide a free buildings estimation service. (This free buildings estimation service is only available to Scout groups and Guide units, whose buildings are insured with Atrium. You can find out if you’re insured with Atrium by checking name of the insurer on your schedule of cover.)

Speak to our team of friendly experts to help you get the right level of insurance for your charity or Scout property.

Further information

For more detail see our step-by-step guide: How to get the right level of buildings and contents insurance