Most business owners only realise they’re underinsured at the exact moment it matters most - when a claim is already in motion and there’s no opportunity to adjust the outcome.
In 2026, that risk hasn’t gone away. If anything, it’s become harder to see coming. Material costs, labour shortages, and rebuild volatility haven’t disappeared.
While inflation has eased in some areas, the real cost of reinstating a damaged business remains unpredictable.
Supply chain delays, skilled labour shortages, and fluctuating availability of key materials continue to push rebuild costs in ways that aren’t always obvious at renewal time.
The key issue is this: insurers don’t settle based on last year’s figures or historical assumptions - they respond to current market replacement costs at the time of loss.
That gap between “what you thought it would cost” and “what it actually costs today” is where underinsurance quietly shows up.
It’s no longer just about bricks, mortar, and basic contents.
Today’s businesses often rely on highly specialised setups, including:
These aren’t off-the-shelf replacements. They often require specialist suppliers, longer lead times, and installation expertise - all of which adds cost and delay when something goes wrong.
One of our clients, a cabinet painting workshop, experienced a fire at their premises.
While the building itself was not a total loss, smoke damage impacted all equipment and contents.
What initially appeared to be a relatively contained claim quickly escalated once replacement discussions began. Spray booths, extraction units, generators, and other critical equipment all needed replacing.
As quotes came in from suppliers, it became clear the true reinstatement cost was significantly higher than expected - driven by current supply constraints, specialist installation requirements, and extended lead times for key equipment.
It was a stark reminder that replacement cost and purchase cost are often two very different numbers in today’s market.
In 2026, sums insured need to reflect the real cost of rebuilding your business today, not what those assets cost when you first bought them - or even at last renewal.
A gap of 10 - 20% might not feel significant on paper, but at claim time it can become the difference between a full recovery and a difficult financial shortfall.
Sums insured should be reviewed:
Because once a loss occurs, the only number that matters is today’s replacement cost - not last year’s estimate.
[This article provides general information only and does not take into account your individual objectives, financial situation, or needs. You should consider whether this information is appropriate for you and seek advice from a qualified insurance broker before making any decisions. Policy terms, conditions and exclusions apply and can vary between insurers. Need advice tailored to your business – speak with an Informed Insurance Broker today]
