Whilst it is undeniable that a flood event and the resultant water damage can have a potentially devastating impact on your business, the risks associated with flooding are becoming increasingly severe as climate change progresses.
When facing a flooding disaster, you should be mindful to take these two main factors into account:
- The short-term need to recover and get up and running again quickly,
- The longer-term need to put measures in place to protect your business against future flood events.
Consider the different cases of two UK businesses, both of which have been long subject to flooding.
Company A experienced continual flooding damage over a number of winters, and responded in a similar fashion each year; filing water damage insurance claims, reviewing the situation with their insurer, and eventually recovering to the status quo many months after the flooding incidents.
In comparison, Company B had to close for six months to undergo repairs after a series of flood events one winter. This had a dramatic impact on the business, both in the loss of revenue whilst closed and in the cost of rebuilding. What was even more daunting was the realisation that this could happen every year, as it had for Company A, and that they could potentially become unable to obtain cover if they continued to suffer from multiple events.
In order to prevent this, Company B invested in property-level resilience measures to counter the increased flooding risks that they could be facing on a yearly basis. Sure enough, when the threat of floods re-emerged in late 2019, Company A was repeating the cycle, filing water damage insurance claims and beginning a slow process to recovery. Whereas Company B’s new flood resilience strategy meant that they experienced minimal damage and disruption, and were up and running like normal within days.
How to manage a water damage insurance claim
Regardless of your flood resilience strategy, there are occasions in which water damage will inevitably be sustained from a flood. In these instances, it is worth following these water damage insurance claims tips:
- Stay away from buildings, walls and trees that appear to be weakened from the flood.
- Monitor local alert and warning systems, as more flooding could be expected.
- Carefully inspect your property, checking for any gas leaks, loose power lines and structural damage before you enter.
- Take pictures and videos of any damage caused to your building and the contents for when you submit the claim.
- Get in touch with your insurance broker, as they will be able to advise you on your level of cover and the claims process.
- Call your buildings and contents insurance companies, who will be able to deal with the resultant water damage.
Increasing flood resilience
As more properties across the UK face a heightened flood risk due to climate change, insurers are responding with increased premiums and stricter terms of coverage, placing more emphasis on business responsibility.
In these times, it is clear that it is wiser for businesses to focus their energy on flood resilience measures, rather than solely relying on a traditional insurance solution. It is also clearly not cost-effective to respond to floods as “one-off” events, making it even more advisable to invest in building a strong flood resilience strategy.
Flood resilience methods can be applied to existing and new builds. You can refit your existing property to account for these risks, and keep resilience in mind at every stage when designing a new building. Some measures that are wise to invest in include ceramic waterproof floors, waterproof wall rendering, and under-floor pumps. By implementing these extra measures, you can speed up your recovery time, reducing the physical and financial damage to your business.
Even if you can’t change your physical property, the simple act of having a flood response plan can improve the outcomes, and possibly your insurer’s assessment of your risks. For example, the use of basic weather warnings as triggers to move equipment or stock offsite or to higher floors can reduce the potential water leak damage.
Parametric flood insurance
For some businesses, it is also worth investing in parametric flood sensors. Instead of assessing the losses after the event, parametric flood insurance is triggered when floodwaters rise to a certain height at a designated measuring station. The policy aims to provide a payout within 24 hours, as long as you meet the conditions agreed upon with your insurer surrounding buildings and contents damage. Whilst parametric insurance can be effective as a standalone policy to help you get your business running again quickly, it can form part of a stronger disaster resilience strategy to protect you against water damage.
The lesson to learn here is that it is equally as important to invest in long-term protection against flood events, as it is to address the short-term problem of initial business recovery. As risks associated with natural disasters such as flooding increase, it becomes clearer that disaster resilience should be accounted for as an integral part of your business strategy.