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Don't get your fingers burnt

Businesses which ignore the importance of an accurate and up-to-date insurance valuation risk being faced with hefty repair bills should their premises fall victim of fire or other catastrophic disasters, warns commercial property agent Prop-Search.

Richard Baker, a Director of Prop-Search, says: “The devastation caused to many businesses in Wellingborough as a result of the fire on the Leyland Trading Estate, and more recently on the Trojan Centre, can only highlight the horrendous effect a fire can have on companies - loss of trading premises, resulting in a significant impact on profitability and in the worst case scenario, the demise of the business.”

“Companies that have not commissioned a specialist Building Cost Reinstatement Assessment (BCRA) could find they are under valued and face further disruption as they are forced to meet with the costs of rebuilding.  This is more important than ever as market values are picking up and seem likely to continue to do so.”

Given the high costs of construction work and the disruption to a business, Prop-Search advises property owners to have valuations as accurate as possible to avoid both under and over insuring of buildings, and to ensure premiums are correct.  Ideally BCRA’s should be carried out by a qualitied chartered surveyor, every three years or at the change of occupancy.  Accurate updates should also be obtained in the intervening years from a recognised source and applied as a percentage increase or decrease.

It should also be noted that where a property is listed, in a conservation area or contains original features, the local authority may insist that repair works are carried out to the same specification and construction as the original.  In addition, the location, site constraints and adjoining buildings will need to be factored into the reconstruction costs.  Each building should be considered on its own merit and any insurance needs to reflect this and take into account the additional cost for non-standard construction and highly specialised work such as shoring, demolition, and local authority and professional fees.

Richard Baker concludes: “Whilst we are witnessing more and more companies taking impartial advice – aware of the damaging consequences of fire and at the insistence of many insurers that values are updated to keep pace with inflation – we would advise all property owners to take the time to review their valuations as a matter of urgency.  This will ensure they don’t get their fingers burnt, should they be the unfortunate victim of a fire.”

Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website:

Monday, October 6, 2014