Businesses across Ireland are facing a major financial risk because so many have not insured their premises properly. Chartered building surveyor Trevor Kelly of Rebuildvaluation.ie has warned that most companies think they have enough insurance, but in reality, their policies often fall far short of what would be needed to rebuild their properties after a disaster.
Over the last four years, Kelly’s team has carried out on-site reinstatement cost assessments for commercial properties regulated by the Royal Institute of Chartered Surveyors. The results are alarming. His findings show that nine out of ten commercial properties in Ireland are significantly underinsured.
Kelly explained that many businesses simply renew their insurance policies each year without reviewing the true cost of rebuilding. Construction costs have risen sharply in recent years due to inflation, labor shortages, and higher material prices. As a result, sums insured several years ago may now be far below what is actually required.
He gave two striking examples. In one case, a waste management company insured several buildings for €8.5 million. However, the true cost to rebuild them was calculated at €36.5 million. That meant the company was underinsured by 77 percent, leaving a €28 million gap.
Another case involved a large logistics warehouse complex. It was underinsured by 82 percent, leaving a shortfall of about €20 million between the insurance coverage and the actual rebuilding costs. If a major incident occurred, the financial impact on that business would be devastating.
Kelly said this is not just a problem on paper. Every year, hundreds of Irish businesses discover they are underinsured only when they make a claim. Fires, floods, or storm damage can lead to massive costs, and when insurance falls short, companies are left to cover the difference themselves.
He stressed that businesses should not wait for disaster to strike before checking their cover. Regular professional valuations are essential to ensure insurance policies reflect real rebuilding costs. Without this, businesses risk financial ruin if the worst happens.
Ryan McNally of property surveyor firm Lloyd Dixon Group, commented:
If commercial businesses are not insured properly, they risk facing massive financial losses if their property is damaged or destroyed. Insurance is meant to cover the cost of rebuilding or repairing after events like fires, floods, storms, or other disasters.”
“When businesses are underinsured, the payout from the insurance company may only cover a fraction of the actual cost. That leaves the business responsible for the rest, which can be a financial burden too large for many to handle.”
“In some cases, the shortfall can be so severe that businesses cannot afford to rebuild or replace damaged facilities. This can lead to long closures, loss of customers, and disruption of operations. For small or medium-sized businesses, it can even force them to shut down permanently because they simply don’t have the resources to recover.”
“Underinsurance can also affect a company’s employees and local economy. If a business cannot reopen after a disaster, jobs are lost, suppliers lose contracts, and the surrounding community can suffer economically. Proper insurance is not just about protecting property—it’s about ensuring the business can survive unexpected setbacks and continue operating.”