Lack of business insurance could wipe flood Towns off the map

TOWNS could be wiped off the map unless urgent measures are taken to ensure businesses in flood hit areas are able to gain insurance.

Thousands of small and medium sized businesses (SMEs) are reeling from the devastating floods which have hit large parts of Northern England including Cumbria, Yorkshire, Lancashire and Greater Manchester.

While homeowners are able to take advantage, of a new facility called:- 'FloodRE', after it launches later this year, in April 2016, sadly this it has not been extended to the business community.

Flood Re has been developed by the Government in conjunction with the insurance industry. It will be in place for 25 years and aims to enable flood cover to be affordable to households at the highest risk of flooding.

However, Stuart Bennett, a director of SME online insurance specialist Quote Dave... says without businesses Towns will struggle to exist.  Stuart said:- "Businesses have been excluded from the list of those eligible to benefit from the setting up of Flood Re. This means that unless flood defences are significantly improved to prevent recurrences then it is difficult to see how businesses could continue to trade as they could be uninsurable for flood. What bank would consider lending to a business that was uninsurable? Would entrepreneurs invest their own money knowing that it was not protected by insurance or would they simply choose a different location for their business? The knock on effects would be catastrophic in all sorts of ways including the impact on house prices locally if there were no businesses and no jobs nearby."

Stuart said another issue facing businesses coming to terms with flood devastation was underinsurance.  Underinsurance can result in inadequate claims settlement or no claims settlement at all. Stuart added:- "Many of the businesses in flood hit regions will be unable to trade for a considerable period of time. Having the right insurance in place is vital during a period of business interruption because it helps to ensure that business bills are paid while it cannot trade normally. Underinsurance can be on the sum insured or more likely the indemnity period; how long an insurer will pay out for. Many businesses choose an indemnity period of 12 months, a time frame which is often found to be inadequate. In the case of a flood claim this could be a considerable period of time while the drying out and cleaning up process takes effect. Many businesses work on the best case scenario to calculate how quickly they will be back trading, although events such as floods highlight the scarcity of resources available; equipment and people; to do the remedial work. The actual work may only take a month, but if you have to wait 3 months for the property to dry out and then a further 6 months for the tradesmen to be available then you don't have much time to restore your business fully before your 12 months are up. If you require planning permission during the process then the times are even longer."

Quote Dave was launched by Southport based David Roberts and Partners, a leading insurance broker which has been operating for almost 40 years. The company's track record enables it to offer Quote Dave customers insurance policies from leading insurers including RSA, AXA and Allianz. Its aim is to provide clients with business insurance based on the right advice rather than the cheapest available insurance.

Stuart explained:- "The flood devastation over the last month has highlighted just how important it is to have the right insurance in place and not just the cheapest quote. Insurance has become a commoditised product often with the emphasis on price. Our advice to businesses is to spend 20 minutes checking their own policy today.  If they think there are any gaps or the sums insured or indemnity periods are wrong then they need to ensure they are corrected. If a loss does occur, you do not want to be hoping that the loss is covered."

Do you have a business that is affected by flooding or you are worried about the probability of your business being affected by flood?  Let us know your views and thoughts about insuring your business for flooding issues, via emailing us to:- News24@SouthportReporter.Com.