FloodFlash, the parametric insurtech company that pays catastrophic flood claims within 48 hours, has released its most comprehensive commercial risk report to date.
The 2022 report combines insight from data partners who contribute to the company’s underwriting, as well as bespoke research, and reveals that 26.6% of all commercial properties in the UK have a low flood risk or are in a ‘1,000 year zone.’
By contrast, 14.4% are at significant risk – defined by FloodFlash as ‘in a 75 year zone.’
“If you consider that risk throughout a 25-year occupancy, the chance of them flooding in that time is roughly one in three,” FloodFlash commercial director Brent Jackson explained. “That’s a huge chance that a business will incur catastrophic losses.”
Forty per cent (40%) of small businesses close for good after catastrophic loss from flooding, and one in four of those who have been flooded in the past 10 years reported experiencing a ‘prolonged period of business interruption.’
The top three sectors at risk are retail at 32.5%, manufacturing, wholesaling, and logistics at 20.7%, and office buildings at 11.1%. Despite this, only 58% of retail businesses surveyed agreed that they had comprehensive insurance.
Manufacturing businesses were better covered, with 76% agreeing they had comprehensive insurance.
Utility and community services businesses prove most likely to have comprehensive flood insurance, with 83% agreeing they have cover. Agriculture sits at the bottom of the list, with just 33% of at-risk businesses from the sector agreeing they have cover.
The report arrives a week after the close succession of storms Dudley, Eunice, and Franklin.
“The risks that British businesses face are becoming more severe thanks to urbanisation, increased frequency of extreme weather and climate change. It’s important not to use individual weather events as evidence of macro trends, but the fact that we’re releasing this report at a time where the nation is recovering from three named storms is not lost on us,” said Jackson.
The report suggests simple ways for businesses to flood prep, including researching the flood risk for a business, creating a flood plan – and getting covered.
