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How customs between the UK and EU will be affected, depends on the result from the parliamentary vote (postponed from the original 12th December date), when negotiators will either show support for the prime ministers final Brexit deal or reject it.
Currently, the UK is part of the customs union with the EU. If the deal is agreed next week, the UK will remain in this union during a ‘transition period' between Brexit and when a future trade deal between the UK and EU is made.
Being part of the customs union reduces administrative and financial trade barriers, such as customs checks and charges, and boosts economic co-operation.
However, if there is a no-deal vote, meaning MPs reject the prime minister’s plan, the UK will automatically leave the union.
Under these circumstances, UK businesses will still have the right to trade with EU countries, however, they will face tariffs and other on-tariff barriers, such as rules of origin checks – which allow governments to determine where goods originate from – and could ultimately drive up the cost of certain commodities.
The threat of an increase in the costs of goods has seen many businesses stockpiling extra resources as a contingency plan in the event of a no-deal result.
Earlier this year Bombardier in Belfast announced it was to begin stockpiling parts in order to mitigate the impact of a no-deal Brexit, potentially costing the company up to £30 million.
In the event that an organisation, no matter the size, makes the decision to store extra stock or expand its business, it is important that it communicates this with its insurance broker so that they can alert the insurer and insure the stock to the correct value.
In the event of a disaster, or interruption to business operations resulting in a claim, and it is found that a company is housing more stock than originally declared, it will be underinsured and the claims award they receive will be affected.
Businesses should not wait until the date of renewal to tell insurers about increased levels of stock, as it is possible for an event to occur in the interim period.
Ensuring there is appropriate insurance in place, that covers the size and volume of goods held by a business, it should be treated as a matter of urgency.
If the worst-case scenario occurs in the form of a no-deal Brexit, a business must contact its broker at the earliest convienence - to consider additonal cover or to make adjustments to exisiting policies - so that appropriate protection is in place, and the longetivity of the business ensured.
At Willis Insurance and Risk Management, our team has extensive experience in assisting and arranging insurance policies for a wide range of industries.
To find out more about underinsurance contact the team via the form below