We wrote last week about Flood Re, the new agreement for affordable flood insurance, and how it’s too late for many people – but that it won’t cover commercial insurance anyway. This is put into perspective by recent news about the damage done to UK businesses by the recent storms.
It seems that the floods of December and January have hit businesses very hard. According to PricewaterhouseCoopers, commercial insurance claims typically make up approximately 10 to 30 per cent of the total insured loss claim. But it seems that commercial claims resulting from storms Eva and Desmond alone will make up about 50 per cent of the total insurance claims.
This is explained by the fact that cities and towns were so badly hit, and according to our people on the ground there has also been a significant number of industrial estates built near rivers which have been affected.
PWC warns that this is likely to be reflected in rates increases when businesses renew their insurance – by as much as 100 per cent in some cases. And this isn’t the only financial hit some of these businesses are likely to suffer: the storms will almost certainly deter visitors, hitting revenue from tourism which is a vital part of the local economy in some of these areas.
Advice to businesses includes increasing their resilience against floods which may in turn reduce their insurance premium: for example by putting up flood barriers, having access to pumps, using alternatives to carpets, having sockets high on walls and using waterproof plaster.
But all of this is likely to add further fuel to the demand for Flood Re to be extended to cover small businesses.