UK – Flash Floods Highlight Need for Business Flood Insurance Cover, Says RMS

Risk Management Solutions (RMS) says that the recent flash floods in the UK have highlighted the need for businesses to find insurance cover for flood damage. Commercial policies do not include flood coverage as standard, neither are they eligible for the newly introduced Flood Re scheme.

The floods also underline the threat of rainfall induced (pluvial) floods, particularly in urban areas, a form of flooding often overlooked, with more focus on riverine flooding, according to RMS.

Vehicle trapped in flood water in Wallington, 07 June 2016. Photo: London Fire Brigade
Vehicle trapped in flood water in Wallington, London, 07 June 2016. Photo: London Fire Brigade

The UK was impacted by a series of floods throughout the summer, and more recently heavy rain and thunderstorms between 15 and 17 September. This led to isolated incidents of flash flooding, impacting some communities and disrupting travel networks.

Adrian Mark, meteorologist and Europe flood risk expert at RMS, says that, “the impact of this weather, while severe in some localised areas, is not expected to produce a significant industry loss, at least in comparison to other recent UK flooding, such as last winter.”

Threat of Urban Flash Floods

Mr Mark added that while a significant industry loss is unlikely to materialise, this event has highlighted the importance of rainfall induced, or pluvial flooding, where heavy rainfall overwhelms local drainage systems, causing temporary channels to form and resulting in flooding. Often this form of flooding is overlooked, with a focus on riverine flooding. However, pluvial flooding can significantly impact urban areas, impacted homes and local business, as observed during the 15 to 17 September floods.

Last week The Guardian said that the government’s National Flood Resilience Review had failed to address the issue of flash flooding, claiming that “flash flooding is a far greater threat to homes, railways and roads than river or coastal floods but is completely excluded from government plans to deal with increased rainfall.”

Insurance Cover

Homeowner insurance policies predominantly include flood coverage as standard, with the insurance industry now supported by Flood Re, a government backed scheme that helps the industry pay for the cost of flooding impacting the most at risk properties.

However, RMS point out that commercial policies do not include flood coverage as standard, neither are they eligible for the Flood Re scheme, yet the cost of flooding to business can be severe, causing damage to premises, stock, as well as business interruption.

Adrian Mark said, “Events like those observed (recently in UK) demonstrate a risk that is generally not well evaluated or understood but can accumulate through a year to be costly to small businesses and ultimately the economy.

“However, high resolution flood maps and models, like those produced by RMS, can help all stakeholders better understand and manage the risk, from the local business that can become more resilient, to the insurance industry that can endeavour to increase the uptake of commercial flood coverage through more informed risk adequate pricing.”

Information from the above article is via a press release from RMS.

Flood summary

Last updated: September 19, 2016
Event
South and South East England, UK, September 2016
Date
September 16 to September 17, 2016
Type
Flash flood
Cause
Extreme rainfall
Flash flooding affected parts of southern and eastern England after torrential rain on 15 and 16 September. The rain caused a landslide which derailed a train, injuring at least two people. Parts of the rail and motorway networks were also flooded, causing travel disruption.

Locations

A - Watford Junction
B - Newbury
C - Didcot Parkway
D - Maidenhead

Magnitude

Rainfall level
45 mm in 24 hours
Farnborough, Hampshire - September 15 to September 16, 2016
32.8mm of the total fell in three hours early on 16 September
Rainfall level
42 mm in 24 hours
Benson, Oxfordshire - September 15 to September 16, 2016

Damages

Injured
2 people
Watford - September 16 to September 16, 2016
2 people were injured after a landslide derailed a train near Watford Junction.