Storm water is heavy, fast, relentlessly destructive and unpredictable.
Steven Lunn, director of Arthur J. Gallagher’s Sheffield office, explains the importance of managing flooding risk.
It is also often an unpleasant pollutant that is expensive to clean up. Average annual flood damage across the UK currently runs at around £1.1 billion – bigger than the yearly budget of the Environment Agency. Today, around 300,000 business premises are at risk of flooding in England alone. To cap it off, friction continues between insurers and government regarding the maintenance of flood defences.
It is down to you to manage any immediate risk that at best will hamper your business and, at worst, stop it in its tracks.
The solution is two-fold: pre-event analysis and the preventative actions you can take to reduce the impact on your business should the worst happen. And the right insurance policies from a broker expert in water risk management can make all the difference.
There are a number of ways you can mitigate the impact on your business:
Forewarned is forearmed: Combine details on proactive physical measures to reduce flood risk with information on commercial property usage to arm your broker with evidence that should enable insurers to offer terms – or even improve your existing ones.
Don’t make assumptions: If you don’t have a good picture of your flood risk, don’t assume your insurance company or commercial landlord does.
Be informed: Investigate the main flood categories, know which ones might affect your location, understand the likely frequency and depth of flooding your premises may experience by researching past records.
Seek out expert advice: Your broker is the critical link between your business and the insurer.
Don’t be afraid to pressure-test your broking partner: Make sure they understand flood risk and can advise you on effective mitigation with skill and in detail.
While your commercial property insurance will take care of the physical damage to premises you may experience during a flood (as long as the property insurer admits liability), it doesn’t take care of the subsequent financial consequences to your business operations. You also need to protect people, income, profits, products, stock, systems and your supply chain.
That’s where a business interruption (BI) and/or disaster recovery policy takes over and can make all the difference, financing the road back from incident to recovery without incurring losses that could compromise your business. If your business is located in a high-risk area, then having a sound flood response plan will help you react faster should the worst occur. In short, expertise – and expert advice – can make all the difference to your terms, your premium and your business peace of mind.