Avoid the risk of underinsurance with a Reinstatement Cost Assessment

June 2023

A recent survey, conducted among business owners and commercial property claims managers, found that 43% of commercial properties in the UK are currently underinsured.

Mike Sutton, Director of Commercial Building Surveying at GJS Dillon says ‘It is for these reasons that we recommend that commercial property owners have a Reinstatement Cost Assessment (RCA).  This helps to determine the cost of rebuilding or repairing a property in the event of damage or destruction.’

When buildings are under insured, insurance companies may also pay out on a pro-rata only basis.  This means if they are under-insured by 45%, then any claim will be reduced by the same amount.  

Duncan Sutcliffe, Director of Sutcliffe & Co Insurance Brokers says ‘ It’s really important that you insure your property for the correct value. You should insure it for what it would cost to rebuild it, otherwise the insurance company may not pay you in the event of a claim.’

Size matters

The assessment considers factors such as the size and complexity of the building, the material used in its construction, and local building codes and regulations. Without an accurate assessment there is a risk that the property won’t be sufficiently covered in the event of an incident. We also take into account features such as landscaping and other outdoor structures as they need to be included in the event of a claim.

How often should an RCA be carried out?

‘We are currently in a period of high inflation, so the risk of underinsurance is higher’ adds Duncan ‘The cost of labour and building materials is increasing exponentially so you need to get your numbers right, especially if it’s a specialist property ’

‘We recommend that a complete RCA is carried out every three years and updates made on an annual basis.’ concludes Mike ‘This will allow for any adjustment to be made, for example if the building is extended and to account for any cost increases.’

GJS Dillon’s Commercial Building Surveying team is led by Mike Sutton, a Chartered Building Surveyor with extensive experience within the property and construction sector.  The team has been involved in an extensive variety of building surveying projects in Worcestershire and the wider West Midlands. Further information about obtaining an RCA or any other commercial valuation report or building survey is available via 01905 676169 or see our website at

Since 1984, Sutcliffe & Co has been trusted with arranging insurance for many thousands of business and private clients across the UK. They have a highly experienced team of specialist commercial and personal lines insurance brokers who look across a wide range of insurers to select cover. For further information see

Image shows from left to right: Mike Sutton, GJS Dillon’s Director of Commercial Building Surveying and Duncan Sutcliffe from Sutcliffe & Co

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