Plan Insurance Blog

Protecting Your Business – Flood Damage

Flood damage can result from a multitude of causes. It frequently has expensive repercussions. The structure of a building, its interior fittings, decoration, mechanical and electrical systems, machinery and stock can all be severely impacted. There’s also expenditure on clean-up and drying operations as well as the cost of ensuing business interruption.

The average cost of flood damage to companies is over £80,000 and figures show small businesses can lose up to 50 working days when they experience flooding leading to loss of custom and damage to their reputation.

The most obvious sources of water damage—flooding from rivers and the sea, as well as surface water runoff—clearly have a huge impact. However, there are other risks that can result in numerous, significant losses, including leaky water systems, appliances, and pipes, as well as water infiltration into the building envelope through roofs, walls, and internal drains.

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Furthermore, many people might think that the winter months present the highest risk, however, during 2021 & 2022, it was July which topped the list for the most flood events. Thunderstorms also often pose a high risk of flash-flooding during the Summer months. March and April were the only other periods with comparable numbers to July for the number of flood events.

This highlights that when summer arrives, despite bringing warmer weather, it also provides a false sense of security from flooding – it poses the same, if not higher, threat level with the most severe storms occurring in mid-August and surface water flooding being prevalent throughout the summer months.

Affected premises

Nearly all structures have plumbing and waste water systems, and many also have other features like hot water central heating, air conditioning installations, and sprinkler systems, where the escape of water or other fluids could result in serious harm. Particularly risky locations include:

  • Multi-storey residential and commercial properties, often with water pressure boosted by pumps.
  • Hotels.
  • Unoccupied premises.
  • Properties with particularly sensitive areas such as computer suites.
  • Buildings with flat or multi-pitched roofs, valley gutters and/or siphonic rainwater.
  • Drainage systems.

Causes: Leaking Pipes

Freezing pipe work is a common cause of leaks after periods of cold weather, but simple preventative measures can minimise the risk, including:

  • Water pipes, storage tanks and other water apparatus in unheated or exposed parts of the premises should be adequately lagged/ insulated and provided with trace heating where necessary.
  • Maintaining “background heating” or installing a frost stat to maintain the temperature in a premises above 4oC. Leaving loft hatches open will allow warm air to circulate in roof spaces where water tanks may be located.
  • Isolating and draining water tanks and pipes when premises, or sections of premises are left unoccupied or without adequate heating.
  • Where possible placing fire sprinkler systems on ‘air’ through winter months

Leaks can also commonly arise due to:

  • Faulty or poorly installed/maintained plumbing in older properties.
  • Incorrectly installed modern plastic push fit type fittings.
  • Incorrectly installed or blocked waste water/sewerage systems.
  • Overflowing/failure of water storage tanks and water heaters.
  • Physical damage such as impact by vehicles.
  • Vandalism.
  • Inoperative condensate drainage systems for air conditioning equipment.

Preparation is key

With all the risks flooding poses to business, it is vital to have a robust business continuity plan and continuity is, in the main, possible due to good preparation, therefore mitigation is a good line of defence against what could be a huge interruption to your business.

Mitigation measures can include

  • Using only reputable Plumbers and Heating Engineers, preferably members of a recognised professional body such as CIPHE (Chartered Institute of Plumbing & Heating Engineers)
  • Maintenance and inspection regimes for water and waste water systems including timely investigation of evidence of leakage such as damage to decorations, damp patches, mould growth and odours.
  • Installation/identification of readily accessible stopcocks to isolate installations from the mains supply. In multi-occupancy premises stopcocks for individual units will allow the water systems to be isolated from shared supplies. Ensuring occupiers know the location of the stopcocks is essential. Stopcocks should be checked regularly to ensure proper operation and if necessary their location clearly labelled.
  • Installation of proprietary automatic control valves activated by water flow detectors to automatically cut off the water supply in the event of prolonged water flow, which is likely to be indicative of a leak or a tap left running inadvertently potentially leading to overflowing of a bath or sink.
  • Inspection and maintenance of water tanks and vessels including the proper operation of float valves.
  • Prohibiting disposal of cooking fats in drains and disposable nappies, sanitary products and similar in WCs.
  • Rerouting pipework and fittings away from areas at risk of accidental and impact damage.
  • Training of staff to isolate sprinkler systems from the water supply in case of damage/leakage.
  • Ensuring an adequate level of security to premises to deter vandals, squatters and other would be trespassers.
  • Regular inspection and maintenance of air conditioning units.
  • Sensitive areas such as computer suites should be not be located in low-lying or basement areas and should be away from water storage tanks and fluid carrying pipework.

Next steps

When you have taken all practical steps toward mitigating the risk of flood events, it is – of course – going to be your insurance that you then need to turn to should the worst happen and you need to make a claim. Therefore it is vital to partner with a broker who can provide you the well considered, comprehensive cover with solutions that will act when you need them to the most.

At Plan Insurance Brokers, for over 30 years we have been providing insurance solutions for all types of commercial operations, across the length and breadth of the country. So we understand – and have seen our fair share of – the aftermath of flood events and the devastation that can be left in their wake.

If you would like to arrange a site visit and review of your insurance arrangements, simply contact our team on 0800 954 0778 and we will do the rest.

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