This week, a report from the Association of British Insurers highlighted the flood risk faced by small businesses.
The report found that hundreds of thousands of homes are at risk of flooding this year, and that many people will struggle to insure their properties.
But the risk is also particularly acute for businesses. Flooding is the natural disaster that occurs most frequently in the UK; there has been at least one major flood every year for the last decade and a half. Small firms across the country must find ways to deal with the threat of flooding – and many are simply unprepared.
The ABI report focused on the risk to homeowners in areas that are particularly prone to flooding. It found that some 200,000 homeowners will struggle to insure their properties after a government deal guaranteeing cover ends in June 2013.
But the report also had implications for small business owners. It highlighted the risks faced by all those with premises in areas that are considered to be at risk of flooding, and underscored the necessity for flood preparedness.
According to the ABI, the Boston and Skegness area faces the biggest potential flood problems, with 7,550 homes at risk. The Vale of Clwyd, Folkestone and Hythe, and Windsor are all close behind. But across the country there are thousands of small firms in flood-prone areas – and they all need to investigate ways to minimise the risk.
Who is responsible for flood defences?
Separately, a committee of MPs has found confusion regarding the management and improvement of flood defences.
According to the Public Accounts Committee, there is who will pay for much-needed improvements to flood defences. It remains unclear whether or not there is sufficient money to pay for the work, which it is estimated will cost at least £1.1 billion a year – potentially rising to £3.5 billion a year over the next decade.
Margaret Hodge, the chair of the Public Accounts Committee, said it is “unclear where the buck stops and who is ultimately responsible for managing the risk of flooding.”
Uncertainty over flood defences is obviously unsustainable, and business groups are pressuring the government to take responsibility. But in addition to centralised flood defence actions, small business owners need to take their own steps to respond to flood risk.
How can I protect my business?
As a business owner you need to alert to the risk of flooding. The 2009 floods, which killed four and led to widespread disruption across the country, highlighted the fact that weather is a force to be reckoned with – and it is one for which businesses need to plan.
The Environment Agency has compiled a flood preparation guide for businesses. It sets out some simple steps you can take to help minimise the risk to you, your employees, and your firm.
The first task is to find out whether your business is located in an area that is at risk of flooding. You can do this by calling the Environment Agency Floodline on 0845 988 1188.
If your business is at risk, you should start putting together a flood plan. This should outline the strategies you will use to ensure the safety of your employees and minimise business disruption.
You should begin by noting down key contacts, including the Floodline, and contact details for all of your staff members. Make sure that you include information about staff members who might require extra help in the event of a flood.
Then, write down key locations of things like fuse boxes and stopcocks. Make clear who will take on responsibility for ensuring that these are secure.
After that, consider what protective actions you can take to ensure the safety of key items. Begin with the most important things, like stock or computer equipment, and work your way down. Set out exactly how you will protect these, and who is responsible for overseeing this.
Your flood plan should be a living document that you will revisit regularly. It should also interact with your general risk assessment activities.
The Environment Agency has put together a standard flood plan for small businesses to fill in. You can download it here.
What about insurance?
Finally, it is vital that your small business is properly insured. You should take the opportunity to make sure that your business insurance policies are up to date and your cover is sufficient.
If you are in an area that is at risk of flooding and you are concerned about the insurance implications, you should contact your insurer directly.