For small business owners, a flood can have a huge impact both emotionally and financially, with the potential for damage to stock and property, disruption to customers and staff, lost power, supply chain disruption, travel difficulties and ongoing costs if the business must be shut for repairs. Flood damage costs the UK approximately £1.3 billion every year.
Whilst it’s impossible to eliminate the risk of flooding, you can manage the risks by ensuring your business is adequately prepared. FSB Insurance Service share five practical steps your business can take to be more prepared in the event of a flood, as well as additional resources you can turn to for more help.
1. Be aware of your flood risk
Whether you’ve operated from the same premises for years or recently moved to a new warehouse, make sure you understand the risk of flooding in your area.
- Sign up for flood warnings
- Check your short-term risk of flooding in England, Wales, Scotland or Northern Ireland
- Some areas are more prone to flooding than others, for example if you’re located near a river that could overflow, so check the long-term flood risk in your area
2. Be proactive and prepared
Anything you can do to mitigate the damage caused by flooding will make it easier to keep your business running as normal. If you know you’re in an area at risk of flooding, you should consider:
- moving essential business equipment and files to a higher level
- investing in flood barriers and other protection measures
- looking into flood-resistant property upgrades
- regularly backing up data and files
- raising your white goods on a plinth
- installing a non-return valve in your sewer pipes
- moving electrical sockets and wiring higher up
3. Write a flood plan
Flooding often happens at short notice, so it’s crucial to have important information to hand during a stressful event. Your flood plan might include:
- contact information for your energy providers, local council and other relevant helplines
- key locations for gas and electricity service cut-off points
- a list of immediate actions you can take in case of evacuation, such as moving stock and alerting staff
If you don’t already have a flood plan in place, the Environment Agency has a personal flood plan template that you can download for free.
Don’t forget to review your flood plan regularly to ensure it’s fit for purpose, especially if you’ve recently made changes to how your business operates.
4. Review your business continuity plan
All businesses should have a business continuity plan in place. It can help you to prepare for the unexpected and keep your business running in the event of an emergency.
You should factor in your flood risk into your business continuity plan – what would your business do if you were suddenly hit by a flood? Although weather warnings can help you to prepare, floods happen fast. Having your plan in place will help you to know what to do, who to contact and where all your important information is.
"One of the best things you can have is to get a solid business continuity plan in place," says David Perry, managing director of FSB Insurance Service. "When we suffered a basement flood in our building, we moved what we could across the road to a hotel. Because we had a business continuity plan in place, we were able to move in the space of a morning and we were back up and running and the impact was very negligible."
Did you know? FSB members can access a free business continuity planning kit by registering with FSB Insurance Service.
5. Check your level of insurance
There are insurers who can help with businesses at risk of flooding, although it does tend to be expensive. The action you’ve taken in earlier steps can make insurers more comfortable taking on the risk. FSB Insurance Service is partnered with FloodFlash, an "event-based" insurance policy which pays a fixed sum when floodwater reaches a pre-agreed trigger level, measured by an internet-connected water sensor.
The British Insurance Brokers' Association (BIBA) has a commercial insurance scheme aimed at improving access to flood insurance for small businesses in flood risk areas which FSB members can access through FSB Insurance Service. It takes a close look at the risks of a commercial property using advanced flood mapping technology, to generate a price for a policy for that property. It also recognises any flood resilience measures installed by the business in its pricing structure and offers "excess buyback" which allows customers to pay a higher premium in return for a lower excess.
Business interruption insurance may cover loss of income after a flood, for example, lost earnings because offices have closed or problems with deliveries if access routes are flooded.
Talk to your current insurer to check your cover. It may be the case that there are special terms you will need to be aware of, and other conditions such as warranties or excesses you would be required to adhere to. FSB members who are registered with FSB Insurance Service can speak to an insurance expert by calling our free insurance advice line.
Where can I find more information?
- FSB Insurance Service has more tips on what to do before, during, and after a flood.
- Learn how to build your resilience with Flood Toolkit
- Visit the National Flood Forum website for more guidance on how to prepare if you’re about to be flooded
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