Our insurers have asked what sum we would like the buildings to be insured for. How do I calculate the cost of rebuilding the practice?
A: My advice on this would be to employ a chartered surveyor to give you an accurate reinstatement cost for your practice. You can base it upon market value, but there are many other aspects to consider when putting in a figure, such as allowances for demolition and site clearance, external works, fees and inflation over the rebuild period.
Some practices have probably maintained the same level of buildings cover for a considerable period of time, not realising the actual cost of reinstating their practice has increased significantly, leaving them in a vulnerable position if there was a total loss. It is better to be safe than sorry, and pay for a chartered surveyor to give an accurate figure, which you can then work from in the following years.