Posted on March 27, 2015
In February we published a blog looking specifically at the various causes of flooding and the problems faced by commercial property owners who will not be able to benefit from the proposed, government backed, Flood Re scheme. This scheme will protect residential properties only. We continue to monitor the situation in order that we can provide best advice to clients.
Insurers use flood mapping packages to assess the risk for each property they quote on and this sets the rate, and therefore the premium charged. The software which insurers rely on generally uses Environment Agency information as its source.
The risk of flooding is not likely to improve and a report recently published by Zurich Insurance confirms that 1 in 6 or 5.2 million properties in the UK (both residential and commercial) are now at risk from flooding.
In our previous blog we highlighted the measures which landlords can take to mitigate extended losses by reviewing their business interruption cover – particularly the indemnity period. According to the Association of British Insurers, premiums can also be reduced if at-risk properties install flood resistance products, such as flood guards, and adopt flood resilience by using materials like water resistant plaster.
The Environment Agency have published a useful guide on how businesses can protect themselves from flooding which can be read by clicking here
Knowledge is power and landlords would do well to find out as much as possible about the potential risk to their property as they can in order to ensure appropriate insurance coverage.
Pii work closely with EDIA Environmental Limited, an environmental insurance expert -together we have published several blogs examining the potential environmental risks facing property owners which ties in with the research we are doing on flood risk. EDIA have been invited to speak on the subject of flood risk insurance at this years UK Environmental Law Association Conference in Liverpool
EDIA, in turn work closely with BWB Consulting who are able to provide useful flood mapping for property owners to confirm the level of risk faced by landlords in respect of their portfolios. BWB have had many examples of sucessfully persuading the Environment Agency to change its land designation to allow sites to be developed or to resolve adverse perceptions from prospective purchasers as a result of their specific site investigations. http://www.bwbconsulting.com/services/flood-risk
Of course, this level of detailed information can also be used in discussions with insurers where they may be given comfort regarding the level of risk and so be prepared to adjust rates or reduce high excess levels.
Pii are happy to liaise with insurers and environmental experts in order to assist clients in assessing the risk to their property portfolio to minimise damage in the event of a loss and ensure that premiums and excesses accurately reflect the risk.
If you would like to discuss flood insurance cover with us, please contact Steve Packer at [email protected].