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- What options are left for companies caught in the credit crisis?
- Pleural plaques – a ticking time bomb for UK business?
- Is your business vulnerable to the virus?
- Sink or swim – would your business stay afloat after a flood?
- Environmental Liability - the polluter pays
- Insurance Clinic
- Insurance Clinic
Sink or swim – would your business stay afloat after a flood?
In the summer of 2007, the UK was hit by torrential rain resulting in extensive flooding. June was the wettest month on record in Britain, with more than double the average amount of rain.
Two years on and with some businesses and homeowners still feeling the effects, the news that increased rainfall is likely to become a regular feature of winter weather is causing concern for business leaders and the insurance industry.
UK Climate Projections, commissioned by DEFRA (Department of Environment, Food and Rural Affairs), has confirmed that the UK is likely to experience wetter weather during the winter months and more extreme weather events like flooding.
The Association of British Insurers (ABI) has highlighted the need for a co-ordinated government-led response to tackle this on-going risk. The ABI supports changes to the legislative framework, including the introduction of the Flood and Water Management Bill detailing preventative measures and calling for ‘strong, national leadership and targets to reduce flood risk.’
While we are yet to see the outcome of this debate, there are still practical steps you can take to manage the risk to your business.
Is your business at risk?
The Environment Agency web site outlines recommendations for businesses seeking to minimise the impact of a flood. Firstly they suggest companies use Flood Map to find out if their premises might be at risk. You can find the flood map at http://www.environment-gency.gov.uk/business/topics/flooding. Alternatively business owners can call the Floodline on 0845 988 1188.
If you find that your business is in a high risk area for flooding you can request to be sent flood warnings by telephone, email, text or fax.
Are you prepared?
The Environment Agency warns businesses to prepare contingency plans. Most businesses can save between 20% and 90% on the cost of lost stock and movable equipment by taking action in advance.
Business continuity plans should be site specific and the level of complexity and detail appropriate to the company. Plans should be reviewed regularly to ensure they are still relevant and tested and rehearsed to evaluate effectiveness.
A relevant and up-to-date plan will demonstrate to insurers and lenders that you’ve taken a proactive approach to risk management and can help stabilise the cost of your insurance in the long term.
Are you covered?
Reviewing your insurance cover is another important feature. Most companies will have business interruption cover but a full review of the gross sum insured and the indemnity period should be undertaken regularly.
If the nature or organisation of your business is complex you may need expert advice from a specialist surveyor to review your requirements and help calculate the gross sum insured.
Associate Director, Julia Harrop, advises,
“The increasing frequency and severity of flooding in the UK puts this peril at the top of the agenda for businesses in high risk areas. Affected companies must consider flood risk carefully as part of their wider risk management strategy, namely:
1. Identify and manage the risks. For example, implement a programme for maintenance of gutters, pipes and plumbing and check periodically that all stocks and key items of equipment are at least 150 mm off the floor.
2. Insure the remaining risks. This isn't just a question of insuring flood as a peril, but denial of access and loss of attraction due to flooding in the vicinity may have an equally disastrous affect on business.
3. Know what you will do in the event of flooding. Talk to neighbouring businesses, consider flood maps etc. Many businesses have started some form of business continuity plan, but few of these are clearly and concisely documented and regularly reviewed, which is vital if the plan is to be of real benefit in the event of a disaster.
The poor survival rates of businesses that do not plan for the unexpected are well documented; a robust approach to business continuity can make the difference between recovery and collapse.”
Contact us
For more information, help with building a business continuity plan or for risk management advice speak to your usual Perkins Slade contact. Alternatively call 0121 698 8000 to speak to a member of our corporate team or email corporate@perkins-slade.com. For further information about CrisisPro, a user-friendly online business continuity planning tool, click here.
Sources
http://www.politics.co.uk/opinion-formers/press-releases/environment-and-rural-affairs/abi-flood-and-water-management-bills-must-stem-the-tide-says-the-abi-$1289692$366385.htm
http://www.environment-agency.gov.uk/business/topics/flooding/default.aspx
http://ukcp09.defra.gov.uk/
