Which Industries Are Most at Risk of Underinsurance in 2026 and Why?

In 2026, we’re still seeing a volatile economic climate deeply impacted by inflation fluctuations and shifting trade patterns. This is leading to UK businesses continuing to face a continuing and often underestimated risk – underinsurance. 

The gap between replacement values declared to insurers and actual reinstatement costs remains a critical issue, despite considerable investment by brokers and insurers into educating policyholders on this topic. Many sectors are finding themselves in a detrimental position of underinsurance because of these uncertainties and misunderstandings. 

In this article, we’ll be unpacking the findings from the latest edition of our annual Insurance Gap Report, which has highlighted the true state of underinsurance that we’re seeing for 2026. We will be investigating which industries are currently most at risk of underinsurance, the financial risks involved, and how businesses can prepare to ensure their survival in the year ahead. 

The Charterfields Insurance Gap Annual Report

Every year, the Charterfields team prepares a report analysing the extent of under or over insurance across various UK sectors. Within each industry, we evaluate the state of insurance for both buildings and civil works, and contents, plant and equipment. 

The research informing this report is drawn from a comprehensive Reinstatement Cost Assessment (RCA) conducted across numerous locations per sector. For example, our team might conduct an RCA at a hospital in the Health Services & Equipment sector, or at a hotel in the Hospitality sector. 

The location’s current declared values are compared with the assessed reinstatement costs after a full site inspection. This annual report compiles all data retrieved in this way over the last seven years. With this, we can accurately analyse long-term trends and periodical changes across a larger pool of data.

The 2026 report snapshot

Our findings for the 2026 report have highlighted substantial changes from last year’s results, including some detrimental effects on particular sectors. Some of our discoveries include: 

• Despite lower inflation in recent years, we have continued to see high levels of underinsurance across many industries and locations 
• Both buildings and contents at all locations we inspected are overwhelmingly underinsured, at 87% and 83% respectively
• The number of locations with declared buildings valued at less than half of their actual reinstatement costs has fallen significantly to 14%. Compared to our 2025 (35%) and 2024 (37%) reports, this shows that, whilst still a concern, more locations are accurately updating values for their property assets than last year
• The same insurance gap for contents however has risen from 37% in 2025 to 48% this year

Let’s dive deeper into our findings for this year’s Insurance Gap Report. 

Insurance gaps for buildings and civil works

Buildings and civil works refer to the permanent fixtures on a site, from fittings and greenhouses to ceilings and parking areas. 87% of the buildings and civil works across our capture group of 373 locations were underinsured in some way. This is an alarming figure that indicates many underlying issues in how these locations are valuing their assets. 

We discovered that for 13 key sectors whose buildings and civil works we assessed over the last seven years, the average rate of underinsurance sat at 24.27%. 

The industry most at risk of underinsuring their building assets was Agriculture & Animal Feeds, with the average cover at 65%. This means that in the event of a total loss, hypothetically, a business in this sector might only receive enough money to rebuild 35% of its facility. This would leave the business in a vulnerable position to find the remaining 65% of the capital themselves. 

The other two sectors posing a significant risk of underinsuring their buildings and civil works was Health Services & Equipment at 37%, and Distribution & Logistics at 30.5%.

Accuracy in insurance valuations works both ways. Interestingly, we also found the Automotive industry over insuring their building assets by 15%. This may be due to operations requiring simpler properties or infrastructure, meaning the costs to reinstate has decreased. By over insuring and overvaluing, firms can end up wasting money on premiums and coverage that they no longer need. 

Insurance gaps for contents, plant and equipment

Contents, plant and equipment typically refers to the various loose items not permanently fixed to the structure of a property, such as machinery, power tools, furniture, and process services. Contents at 83% of our capture group of 95 locations were underinsured. 

The data for these assets produced even more alarming results. Across seven sectors that we analysed, the average rate of underinsuring contents sat at a staggering 93.60%. Again, the Agriculture & Animal Feeds sector was found to be the most at risk of underinsurance, with actual reinstatement at an average of 290% of the declared values. 

With this detrimental gap of almost 300%, in the event of a total loss, agricultural businesses would be unable to replace their essential contents and specialised equipment. In the event of a claim, insurers may apply the “average clause”, which reduces payouts proportionally to the level of underinsurance. For instance, if a business declares an asset value at £1 million but the true reinstatement cost is £2 million, the insurer may only pay 50% of any claim. 

Since specialised contents, plants and equipment assets are necessary for daily operations in this industry, failure to replace them would challenge business continuity. This would result in even greater losses to income and potentially lead to closure.

The other two sectors posing a significant risk of underinsuring their contents, plant, and equipment are General Manufacturing at 169%, and Housing at 70%. As a reminder, 48% of the locations Charterfields assessed had contents valued at less than half of their reinstatement costs. These are extremely worrying statistics, and suggest significant shortfalls in declared values. 

What is causing these rates of underinsurance? 

The rates of underinsurance across buildings and contents in 2026 are concerning and indicate an unaddressed risk to the future of many businesses. A lack of clarity in valuing and insuring assets is the primary factor causing these rates of underinsurance.

One of the most common causes of friction in insurance claims is what constitutes the building, and what counts as contents. The demarcation of assets means that some sectors may not understand how to correctly value their items, and are therefore putting themselves at risk. 

For the 290% gap in contents, plant and equipment for the Agricultural & Animal Feeds industry, this suggests that businesses are valuing their specialised machinery, equipment, and feed at only a fraction of actual reinstatement costs in 2026. Many businesses also appear to be insuring on second hand values, instead of replacement with a new cost. 

There are other factors at play too:

• Business owners are struggling to understand reinstatement costs for complex and specialist locations, such as listed and heritage properties
• In rapidly moving sectors, such as Food and Automotive, equipment movements and technology changes are leading to policyholders losing track of values as well as misunderstanding the true current cost of their assets 
• A misunderstanding of inclusions and exclusions, as well as insurable responsibilities, is leading to incorrectly categorising assets or misaligned policy terms, which can lead to overlaps or gaps in cover 
• Rising inflation leading to increased costs for building materials and contents, which may not track to CPI, can be missed in asset valuations

Overall, some industries are moving into the year being underprepared, incorrectly insured, and unprotected. The cases of under and over insurance are a silent risk, but with very material consequences. These sectors may not realise they are at risk until it is far too late.

Recommended actions

For the industries identified as at-risk in our latest report, the time to act is now. Rather than worrying about the data, let’s solve the problems while there is still time. We recommend to:

1. Review your assets regularly
   Update valuations at least every three years or sooner after major changes in operations, acquisitions or refurbishments to get the most accurate valuation.
2. Understand policy terms
   Work with brokers to clarify responsibilities for leased properties, and accurately demarcate between buildings and contents.
3. Educate stakeholders
   Ensure your finance, facilities, and insurance teams align on declared values and reporting processes.
4. Don’t just rely on online tools
   Simple online estimation tools are not providing policyholders the information, nor the correct and accurate values, they need to declare to insurers. 

Finally, a professional insurance valuation is a modest investment compared to the cost of a denied or reduced claim. To avoid the financial shock of underinsurance, we ultimately recommend the most vital step: 

5. Schedule a professional valuation
   Use accredited valuation experts who conduct on-site assessments and understand your sector-specific factors and nuances.