Steve Packer by

Posted on May 5, 2016

Following on from our previous posts on the subject, the newly launched Flood Re scheme will now ensure that flood cover is available at reasonable rates for residential home-owners.  Critically, however, the scheme does not extend to commercial properties which leaves many businesses – particularly in flood prone areas – unable to source insurance cover for flooding.

The Association of British Insurers (ABI) are of the view that there is not currently a need for a commercial Flood Re scheme, claiming that most businesses are still able to arrange flood cover at a competitive premium.

There is evidence which goes against this view, however.  Following Storm Desmond which hit Cumbria in 2015, flood damage was caused to 25,000 business premises.   Many of these premises were either not covered or had very high excesses imposed on their policies following previous damage from the storms in 2012.   This additional financial burden has caused some SMEs to cease trading, and this problem is not likely to go away any time soon with the global forecasts indicating that these severe storms are likely to become a regular occurrence.

Funding for flood resistance schemes can be sourced from local authorities, with Government also stating that they will provide more flood relief schemes.   This is not likely to help business premises however as funding for such schemes tends to be focussed on protecting residential areas rather than commercial property.

Pii are keen to work with property owners in order to ensure that they have adequate flood protection.   We are actively seeking options for commercial property owners to ensure that they have access to flood cover at a reasonable premium.   In the meantime, we  would advocate speaking to your broker in the first instance to discuss how we can provide advice and assistance for business owners.

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