Safeguarding Your Business: Preparing for Flood Risks in the UK

In recent years, the UK has experienced an increase in extreme weather events due to climate change, with flooding becoming a pressing concern for homeowners and businesses across the nation. This article will explore steps that businesses can take to protect themselves, limit losses and avoid insurance disputes in the event of weather damage.

According to the Flood Flash Commercial Risk Report 2022, a staggering 42% of London’s 300,000 commercial buildings are under threat from flooding caused by torrential rain. What’s more, businesses in the UK are twice as likely to face flood risks compared to other property types.

The repercussions of such disasters can be devastating; according to Nicola Maher, Insurance Litigation Partner at Edwin Coe LLP, 40% of businesses shut permanently after catastrophic losses caused by flooding and around a quarter of businesses have experienced significant interruption, disruption to operations and suffered financial strain. In the aftermath of a flood, half of affected businesses find themselves forced to replace or repair equipment, stock, or endure expensive cleanup efforts.

Property insurers paid out the equivalent of £13 million every day last year to help homeowners and businesses cope with unexpected and unwanted events like flooding and theft, according to figures published today by the Association of British Insurers.

ABI figures reveal that the industry paid out £4.86 billion to homeowners and businesses in 2023, with home insurance claims accounting for half of this figure (£2.55bn). This marked a near 10% increase on 2022 totals (£2.33bn) driven by weather damage due to adverse conditions.

Furthermore, weather-related claims hit a record high of £573 million, propelled by storms like Babet, Ciaran, and Debi which caused £286 million in flood-related damages. Businesses bore the brunt, having made £443 million worth of claims for weather damage. The average claim payout also rose by 11%, reflecting that the cost to insurers for replacing goods or making repairs has also risen.  

What can be done? 

Given the risks posed by flooding, businesses must take proactive measures to safeguard their operations. Understanding the actual risk level is paramount. Signing up for flood warnings and utilising government websites to assess long-term flooding risks in specific areas are essential steps. Furthermore, businesses should develop comprehensive flood plans. These plans should document crucial information such as the location of electricity and water cutoff points and outline necessary actions to mitigate the impact of a flood. Valuable guidance for drafting such plans can be found on the Environmental Agency’s website.

Investing in flood insurance is non-negotiable. Such coverage can alleviate the financial burden of recovery efforts. Moreover, integrating flood insurance into a broader business continuity plan is imperative. This plan acts as a roadmap for re-establishing operations in the event of a loss. Regularly reviewing insurance policies to ensure adequate coverage for full reinstatement costs is essential. Business owners should also consider factors like hard standings, such as a car parks, when determining coverage needs. Additionally, securing business interruption insurance can mitigate the shortfall in gross profit caused by operational disruptions.

In the face of escalating flood risks in the UK, businesses must prioritise preparation and resilience. By understanding the threat posed by flooding, implementing proactive measures, and securing comprehensive insurance coverage, businesses can bolster their ability to weather the storm, both figuratively and literally. Embracing these strategies not only safeguards businesses but also ensures their ability to thrive in the face of adversity.


About the author

James recently joined us in 2024 as a Learning Design Specialist. A former schoolteacher, James brings a wealth of experience. With his background as an educationalist, he brings great insight into learning processes and looks forward to using his experience in the classroom to enhance Development Zone content, boost learning engagement, and enrich the educational experience of users.

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