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Does Flood Insurance Cover Business Interruption?

Oct 17, 2022

As we see changes to our weather and more extreme weather events, flooding is increasingly becoming a risk that your business must consider when it comes to business continuity.

You’ll need to think about having insurance in place which can protect your business from the impacts of flood

  • property insurance can cover damage caused to your premises by flooding
  • contents insurance can cover damage caused to your property by flooding
  • stock insurance can cover damage caused to your stock by flooding
  • business interruption insurance can cover you for loss of income that your business may suffer if you must cease trading for a period of time as a result of suffering a disaster event such as a flood

Business interruption caused by flooding

It is likely that you will experience some type of business interruption if your business is impacted by flooding.

For example, if your shop is flooded it can take weeks for water to be cleaned up and for premises to dry out. This may mean you are unable to open to customers for a prolonged period.

Flooding is a peril that most business interruption insurance policies will include cover for. You’ll likely be covered for business interruption linked to damage caused by flooding. But it will of course be important to read the policy wording and terms and conditions of any cover you intend to take out to ensure that you understand exactly what cover is included.

What if you have experienced flooding before or are in a flood risk area?

Your business may find it more difficult to access insurance which includes cover for flooding if you are deemed to be in a high risk flood area, or if you have experienced flooding previously.

If you are in a flood risk area this can make commercial insurance solutions either extremely expensive, or simply unavailable.

In this situation, you may be best placed to work with an insurance broker who may be able to discuss your insurance requirements and risk management strategy with an insurer.

Your broker may also be able to access the BIBA Commercial Property scheme. This is a scheme aimed at helping businesses in high risk flood areas or those who have suffered flooding before.

The importance of flood risk planning

As well as having the right insurance in place, you will also need to consider flood risk planning to help protect your business. From areas such as identifying if you are at risk of flooding, takings steps to minimise the impact a flood would have on your premises through to business contingency planning.

Putting these steps in place can also help demonstrate to insurers that you take risk management seriously and that it is embedded within your business.

At Anthony Jones we understand that flooding can pose significant risk to businesses of all types and sizes. That is why we work hard getting to know all our customers and developing a full understanding of their business and risks to help them obtain the right types of insurance to protect their business. Get in touch with us at business@anthonyjones.com or 020 8290 9080 to see how we can help you.

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