28th July 2020

Are your claim payments enough to rebuild your club house & replace equipment?

By Colin Mico
Account Executive
Rugby club house

During the last few months, we have seen a number of Club House rebuilding valuations that clubs have carried out with RICS Surveyors.

Club House Rebuilding costs are something that we have been tracking for some time following a claim that we handled where the professional valuation was far greater than the figures that both we and the club thought reasonable.

We have known from previous discussions with surveyors, that to build a new Sports Pavilion would cost over £ 2,000 per square metre plus VAT, as this includes all the groundworks, and as a result the rebuild cost of a pavilion using the same footprint would be around £ 1,000 per square metre (plus VAT).

What did surprise us was the amount of increase in demolition / removal of debris costs, and architect fees.


Sums Insured Calculations

Normally insurers will not apply average, if the sums insured are within 15% of the reinstatement costs that they calculate, but many of the clubs that we have seen have sums insured that fall short of the valuations that have been carried out.

Examples are below:

 

Small pavilion (100sq. metres)

Medium (250 square metres)

Large (400 square metres)

Standard Construction

£ 161,500

£ 403,650

£ 650,000

Non-Standard

£ 91,260

£ 228,150

£ 365,040

 

Similarly, with your equipment, our insurers offer reinstatement cost which will provide you with a newer piece of equipment and include VAT if you are not VAT registered.

With scrum machines alone costing £ 5,000 to replace, even a small fire in your equipment store could produce a £ 20,000 claim.


Insurance Act 2015

Under the Insurance Act 2015, the onus is on you the client to make a fair presentation of your risk after a reasonable amount of enquiry.

You get to choose the sums that you wish to insure. Insurers will rarely question the sums insured at point of starting the policy, that is why the duty falls on the broker to advise you appropriately to help you meet your obligations.

No one wants you to end up having a bad or disappointing experience when you come to claim, but this is what normally happens when average gets applied / claims payments reduced as a result.

In extreme cases, where the sums to be insured can be shown to have been understated wilfully, insurers would have the right to decline the claim on the grounds of fraud.  


Insurance Solutions for your Rugby Club

In the last ten years, there have been any number of industry reports warning against the perils of under- insurance and concluding that it is endemic in organisations run by busy volunteers (for obvious reasons), Small commercial and household insurance.

There was even an article in the Sports Press which raised the issue that “if your Club House is insured for £ 150,000 and it costs you £ 25,000 to clear the plot, and then another £ 25,000 to draw up architect plans and planning permission, you will only have £ 100,000 to rebuild it!”.

I think that the important thing to you, is that any form of under-insurance would require you to top up the claim payments with club funds. 

It is one thing to have to find a few hundred pounds for insurance premium or a small piece of equipment, quite another to suddenly find over £ 250,000 to rebuild your pavilion.

For advice with your sums insured & your insurance cover, please call Colin Mico 01883 868521