Jurisdiction(s):
United Kingdom

Underinsurance in UK Property and Business Interruption Insurance: Causes, Remedies (Average, IA 2015, CIDRA 2012) and Broker Duties—Infinity Reliance v Heath Crawford

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

This Practice Note offers an in-depth examination of underinsurance, its principal causes, the remedies available to insurers when policyholders underinsure, and recent case law concerning brokers’ duties.

Introduction

Underinsurance remains one of the most entrenched problems in UK property and business interruption (BI) insurance. A majority of policyholders arrange cover for less than the full value of their assets and, as a result, risk significant shortfalls if they need to claim. Despite how common it is, reported decisions on underinsurance are scarce. Much of the applicable law stems from the Insurance Act 2015 (IA 2015), the Consumer Insurance (Disclosure and Representations) Act 2012 (CI(DR)A 2012), and older authorities on materiality and disclosure. For more on IA 2015, see Practice Note: Insurance Act 2015 (IA 2015)—essentials, and for CI(DR)A 2012, see Practice Note: A guide to the Consumer Insurance (Disclosure and Representations) Act 2012.

What is Underinsurance?

Definition

Underinsurance arises where the sum insured or declared value is inadequate to cover the actual loss after damage. This can occur in relation to:

Material damage—where the insured value is below the true rebuild or replacement cost
BI—where declared gross profit,...

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Alexander Rosenfield

Fenchurch Law

Alex is a Senior Associate at Fenchurch Law. He specialises in insurance coverage disputes for policyholders with a focus towards property damage claims. Prior to joining Fenchurch Law in 2017, Alex worked at Elborne Mitchell in the heart of the London insurance market. He trained with BPS Law LLP in Manchester, specialising in policyholder coverage work. Alex is passionate about delivering Fenchurch Law’s mission statement of levelling the playing field for policyholders and has been quoted in several of the country’s leading insurance publications and newspapers on policyholder coverage issues. Those include an article for the Guardian which highlighted the challenges of complying with ‘Unoccupied Buildings’ conditions at the height of the COVID-19 Pandemic. Alex graduated from the University of Birmingham in 2009, before completing the LPC at the College of Law in 2010. Away from his practice, Alex is a member of the Society of...

Web page updated on 22/05/2026

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