Is your commercial fire insurance quote really protecting you?
- RebuildCostASSESSMENT.com
- 2 days ago
- 5 min read
Updated: 9 hours ago
If your fire insurance quote was quick and easy to get, it might not cover the real risks your property faces. Many commercial property owners believe that their policy will do until a claim reveals the gaps.
In 2021, UK insurers paid out £1.3 billion in fire-related property claims. Yet 79% of commercial buildings are still underinsured. The main reason? The rebuild cost used in the quote is often too low.
Many fire insurance quotes miss key details, such as:
Accurate rebuild costs based on today’s labour, materials, and inflation
Business interruption cover for income loss or rental voids during repairs
Rules about unoccupied buildings that limit or void fire cover after 30 days
Clauses that exclude damage caused by wear and tear
Confusion over cover when a property is mixed-use
At RebuildCostASSESSMENT.com, we provide desktop assessments. We are RICS-regulated, providing property owners with a reliable rebuild cost quickly, affordably, and without a site visit. Insurers and brokers can then use this figure to build more accurate cover.
Think your current quote has you covered? Let’s take a closer look.
Where a commercial fire insurance quote can go wrong
What your quote leaves out could cost you everything. Many commercial fire insurance quotes look complete until you try to make a claim.
Often, property owners discover their policy is based on outdated rebuild values. Some don’t include business interruption cover. Others exclude claims if the building has been unoccupied. These gaps don’t show up on comparison sites, but they can mean the difference between recovery and serious loss.
In a recent case, a commercial building in Penrith was insured for £700,000. After we completed a professional rebuild assessment, the true rebuild cost came to £1.4 million. If a fire had occurred before the update, the owners could have lost 50% of their claim.
Even more complex properties, like listed buildings or mixed-use sites, are often quoted using generic data. Online tools focus on speed and price, not accuracy or protection.
Here’s where quotes often go wrong and what accurate ones should include:
Category | Typical Quote | Accurate Quote |
Rebuild Cost | Based on outdated figures or market value | Professionally assessed using current materials and labour costs
|
Business Interruption | Often missing or limited to 12 months
| Tailored to how long it would take to fully reinstate the business
|
Occupancy Assumptions | Doesn’t reflect vacancy or mixed-use risks
| Includes unoccupied terms and flexibility for tenant changes
|
Exclusions | Unclear wording or limited cover for wear and tear
| Clear terms that explain what is and isn’t covered
|
Liability Considerations | Public liability may be basic or optional
| Includes realistic cover for how your building is used |
Check your quote carefully – does it reflect the true cost to rebuild your property?
The hidden costs of underinsurance
Underinsurance can financially cripple a business. If a fire damages your property, your insurer won’t use the market value to settle the claim—they’ll use the rebuild cost. If that figure is too low, you may only get part of what you need.
This is where the ‘average clause’ comes in. It’s a common rule in commercial property insurance. It reduces the payout if your property is underinsured.
For example, if your building should be insured for £1 million but is only covered for £500,000, your insurer may pay just 50% of the claim, even if the damage costs less than £500,000.
Want to know more? Read our full guide to the average clause in insurance.
The effects of underinsurance can be wide-reaching. It can delay business recovery, affect tenant agreements, and strain finances, especially if business interruption cover is missing or too limited.
Why does underinsurance happen so often?
You haven’t had a professional rebuild assessment in years
OR
You based your cover on market value, not the true rebuild cost
The Association of British Insurers advises, “You should always insure your business premises against the cost of rebuilding the property, not against its sale price or current market value.” That process starts with knowing what your rebuild cost actually is.
Comparison sites often suggest using free calculators. But those tools don’t work well for complex or listed buildings. In fact, they can be misleading.
Free calculators can give a false sense of security, especially for commercial properties. Rebuild costs vary depending on layout, use, and risk level. Only a professional assessment can give you confidence that your cover is correct.
How to pitch a better policy internally
“We’re not simply switching insurers — we’re upgrading our risk strategy.”
If you help protect your company’s property, now is the time to change the conversation. A fire insurance quote should do more than cut costs. It needs to help the business stay secure.
A strong policy is built on facts. It should use an accurate rebuild cost, realistic business interruption cover, and clear liability terms. These aren’t just optional features – they’re essential to protecting your business from major financial loss.
Start by treating insurance as a core part of your risk planning, not just paperwork.
A rebuild cost assessment from RebuildCostASSESSMENT.com can help you make that case. We are regulated by RICS and deliver trusted, accurate valuations.
When you speak to decision-makers, focus on:
Fire risks and what underinsurance could cost
The rebuild figure - use a proper assessment, not a ‘guesstimate’
Business interruption – how long recovery would really take
Why insurance is a compliance issue, not just a budget line
Claim history – use real examples to show how insurers respond
Don’t just compare quotes – present a better strategy.
The best time to rethink your fire cover is before the fire
Fire insurance is about more than compliance. It helps protect your building, your income, and your ability to recover after a loss. But for that protection to work, your policy must be based on accurate information.
Now is the time to check your cover, question your quote, and make sure your rebuild cost is right.
RebuildCostASSESSMENT.com can help. Our expert team provides trusted rebuild figures – often for less than you might expect.
Don’t wait for a claim to find the gaps.
Other Helpful Resources
Looking to deepen your understanding of commercial property insurance? These guides can help:
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