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Managing the risk of storm or flood water

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The record-breaking floods experienced on Australia’s eastern and western coasts have caused untold devastation to people, communities and businesses. Although the wet weather associated with La Nina is expected to diminish by the end of the year, extreme weather events are likely to continue, so how do you protect a property vulnerable to floods?

The following are some ideas to assist you in managing the risk and consequences of storms and floods, including through insurance, when available.

Stormwater vs floodwater damage

If your business premises are vulnerable to floods, you should review your property insurance to confirm if flood insurance is included in the policy. If you don’t have flood insurance, contact your adviser to find out if flood coverage is available for your location and, if so, what is the premium and flood excess. It’s important to know that insurers classify storm and floodwater damage differently based on the cause of the damage and the type of insurance coverage.

Floodwater damage is caused by overflowing a river, canal, creek or lake.

Risks to SMEs that are vulnerable to floods

You probably know the main risks if your business is vulnerable to floods, but these include the following:

Property damage: Floods can cause damage to buildings, equipment, and inventory, which can disrupt operations and result in high costs for repairs and replacement.

Business interruption: Floods at the premises or general area can force businesses to close, resulting in lost revenue and increased operating expenses.

Supply chain disruptions: Floods often impact the delivery of goods and raw materials, resulting in supply chain disruptions and production and delivery of goods.

Insurance challenges: Businesses may struggle to secure adequate insurance coverage for flood damage, mainly if they’re located in high-risk flood zones. So, the only alternative is to manage the risk of water damage through storms or floods.

Managing the risk of storm or floodwater

Conduct a flood risk assessment before purchase or leave of the premises to identify if you’re in a flood zone, your insurance adviser has access to flood zone maps;
Develop an emergency response plan, including evacuation procedures.
Raise electrical components, including outlets, switches and wiring, clear of the potential flood level;
Install backflow preventers to keep contaminated water from flowing back into your building's plumbing system;
Have a plan in place to be able to move important documents, equipment and inventory to a location that is less vulnerable to flooding;
Have sandbags, pumps and other flood-fighting equipment on hand;
Consider purchasing flood insurance to cover damages and losses (if available and not already included in your current property insurance policy);
Train employees on flood safety procedures and what to do in an emergency.

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Conduct a flood risk assessment before purchase or leave of the premises to identify if you’re in a flood zone, your insurance adviser has access to flood zone maps;
Develop an emergency response plan, including evacuation procedures.
Raise electrical components, including outlets, switches and wiring, clear of the potential flood level;
Install backflow preventers to keep contaminated water from flowing back into your building's plumbing system;
Have a plan in place to be able to move important documents, equipment and inventory to a location that is less vulnerable to flooding;
Have sandbags, pumps and other flood-fighting equipment on hand;
Consider purchasing flood insurance to cover damages and losses (if available and not already included in your current property insurance policy);
Train employees on flood safety procedures and what to do in an emergency.

Contact your local insurance adviser, who can help with risk management advice, including risk assessments, emergency response plans and flood insurance. Together, these are essential elements to minimise the impact of water damage on you and your business.

flood flood damage

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.