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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. |
