Reinstatement

The majority of home and contents policies have automatic reinstatement of the insured amount. This means that if your home is damaged or your contents burgled, after the claim has been paid, the original amount of insurance cover is reinstated back on your policy.

That is not necessarily the case with business insurance. As an example, if you had $10,000 worth of burglary cover and suffered a loss of (say) $8000 worth of your insured items due to burglary, unless you contact your insurance professional and arrange for the burglary cover to be topped up, only $2000 worth of burglary cover will remain for the remainder of the policy year.

Although the cost of the reinstated cover is proportioned for the remainder of the policy year, if your policy is due for renewal, you may elect to take the risk and not bother to arrange reinstatement.  The danger with this approach is that burglars often return to the scene of their previous crime in the knowledge that the business insurance will replace what they have stolen with new items.  Even though the business may have upgraded security in the mean time, the layout and the exact location of the new replacement items they are after is known.

A burglar’s master keys.