How to protect against flood damage

A version of this article was first published in December 2021.

Water in all its forms is destructive and unforgiving, devastating property and risking people’s lives. The effect of floodwater on property and businesses can be equally formidable, with stock, equipment and premises lost to the power of nature.

While nothing can be done to stop flooding entirely, there are several key steps any landlord or business can take to help mitigate the effect of a flood and reduce the risk that such an event will pose.

Should your premises flood there are important steps you can take to ensure the impact of the water is minimal and doesn’t cause your business long-term damage.

Read on to explore our guide on how to protect your business from flooding.

Flooding is on the rise

Flooding is a natural phenomenon, periodically causing major damage and disruption to communities and businesses throughout history. However, if the situation was bad before, things are only predicted to become more severe over the coming decades.

Human-induced climate change is causing a surge in extreme weather and, in turn, the risk of flooding is becoming extreme. The impact will inevitably be felt by people and businesses at a local level.

Indeed, Emma Howard Boyd, chair of the Environment Agency, commented in October 2021 that “the climate crisis is global, but its impacts are in your village, your shop, your home”.

Global temperatures are predicted to rise significantly over the next century. The rate of warming has risen by 0.20 degrees Celsius every decade since 1982.

And you may think that the Earth getting warmer has nothing to do with floods, but it actually throws all of our weather patterns completely out of whack. Even at the lower level of global warming, extreme weather events will become significantly more common, with dangerously heavy rainfall leading to increased flooding.

Also, with sea levels predicted to rise by nearly three feet over the next century, significantly more low-lying coastal areas will become at-risk from tidal or storm surge flooding.

The cost of flooding in the UK

Flooding is the single most widely destructive force of nature. Approximately one in six properties — including business premises — are at risk of flooding. Business premises are more likely to be destroyed by flooding than by fire, wind or an earthquake, and this destruction comes at a significant cost.

Engineering consultancy firm Sanderson Associates have provided data suggesting that the average cost of fire damage to a commercial building is £7,300, with losses from a burglary averaging at just £1,033.

Flooding, meanwhile, causes an average of £28,000 worth of damages per property, per incident. The scale of the problem is also huge with upwards of 185,000 commercial properties classified as at risk of flooding in England and Wales alone.

For landlords, the costs to fully repair a home damaged by flood water can vary wildly. Estimates range from £4,500 all the way up to £33,600.

During the particularly bad 2015-16 winter flooding season, estimates by the Environment Agency put the cost of the flood damage between £1.3 - £1.9 billion. Businesses will usually make up between 10% and 30% of flood-damaged properties seeking insurance payouts. However, in a particularly bad winter, such as 2015 to 201616, this figure rose to 50%.

This seems to paint a bleak picture for businesses, especially since every winter seems to bring with it a host of storms. The reality is that with concerted flood mitigation efforts and robust business continuity plans, the Environment Agency concludes that “most businesses can save between 20 and 90 per cent on the cost of lost stock and movable equipment”.

What can you do to protect your business?

Research the flood risk

One of the first steps you can take to mitigate your exposure to the long-term risks of flooding is to understand the nature and extent of the risk in your local area. The government has a useful tool for checking what the risk of flooding is in your area, based on entering your postcode.

This will let you know whether your property or business premises are at a low, medium or high risk of flooding, either from surface water or from rivers and seawater.

The different causes of flooding are important to help understand how your property could be threatened. Flooding usually comes from one of the following four sources:

• Rivers (fluvial)
• Surface water
• Groundwater
• Coastal sources

It’s worth remembering that your property could be based on higher ground, far from a river or the coast, but still be at risk of flooding in the event of extreme rainfall and overwhelmed drainage systems.

You can sign up to flood warnings by text or email that will let you know if flooding is expected imminently in your area, 24 hours a day. This important tool can help you get important business equipment out of a flood-prone building, or to warn your tenants before it’s too late.

Create a flood plan

Part of preparing thoroughly for the possibility of a flood hitting your business is creating a flood plan — putting down all the important details in black and white.

This document should be easily accessible to you and all your staff or tenants and include easy-to-digest information about how to prepare for a flood, as well as how to react if such an event occurs.

A good business flood plan will outline:

• Evacuation routes
• Location of important documents
• Details of stock and electrical equipment
• Flood warning details
• Gas, electricity and water supply details (including location of fuse boxes and gas cutoff valve)
• A contact sheet of personnel and their responsibilities in the event of a flood

Floodhub has created a useful Flood Plan Guide that could help you in identifying what needs to be included in your flood plan.

Create and review your company’s business continuity plan

Your flood plan will cover important actions you should take when a flooding incident strikes, however, your business activities are likely to be impacted even after the flood waters have receded.

Ensuring that your business is able to continue operating in some form can reassure customers and investors and enhance the reputation of your business.

That’s why it’s crucial, especially if your business is in an area that is prone to flooding, to create a business continuity plan as well.

The Federation of Small Businesses (FSB) has created a helpful guide to creating a business continuity plan which could help your business survive and even thrive during a major period of disruption, such as the aftermath of a flood.

Insurance plays a significant part in business continuity. Superscript’s business interruption insurance is designed to provide financial support if you do experience downtime because of an unexpected event such as a flood.

Insurance for flooding

As mentioned above, the payouts to businesses by insurance companies for flood damage can, be in the billions. With the costs of repair and replacement often extremely high, business insurance sits at the very heart of whether or not a business might survive their premises being flooded.

There are several different covers that you should consider that can significantly help your business overcome the obstacle of a flood:

• Employers' liability is a mandatory cover for most businesses with employees, this will cover your liability if a staff member is injured during a flood.
• Business equipment can protect everything from phones and laptops to specialist tools of your trade. This insurance can cover the equipment that your business relies on should it be damaged or destroyed in a flood.
• Business interruption is a key cover for business continuity and can support your company's projected profit for a period when your premises are uninhabitable.

As a commercial or residential property landlord, there are some alternative covers you might want to consider:

• Commercial landlord insurance is designed to protect your property portfolio against a range of exposures, including flood or water damage.
• Residentical landlord insurance is designed to protect your residentially let property against a range of exposures, including flood or water damage.
• Residential landlord home emergency cover is a specialist fast-response cover designed to offer landlords enhanced protection if a sudden and unexpected event causes damage to your property, such as a flood. It can also cover some of the costs associated with temporary accommodation for your tenants.

What to do after a flood

Even if you have taken all the precautions mentioned above, when flood waters rise there is often not much that can be done to hold back the waters, and even the most well-prepared businesses can be affected.

But it’s important to spring into action straight away to reduce the impact of the flood.

Prioritise safety

First and foremost, if you are working in your business premises when a flood strikes, safety is the immediate priority. Evacuate staff according to your flood plan and inform family and next-of-kin that you and your employees are safe.

If you’re a landlord, keep lines of communication open with your tenants to ensure they have a way to reach you and keep you updated.

Secure and remove equipment, documents and stock (if possible)

Start by removing equipment and documents to higher ground if it is safe and practical to do so. At no point should you ask staff to put themselves in any potential danger to protect the business.

If you’re a landlord, ask your tenants to do the same.

Your business equipment insurance will cover the cost of replacing damaged office equipment and any tools of your trade up to your policy's limit so it’s not worth risking anyone’s safety to recover them.

Contact your insurance provider as soon as possible

As soon as your premises has been affected by a flood, contact your insurance provider as soon as is practically possible, even if you don’t know the extent of the damage yet.

Businesses may be able to access immediate business interruption cash and landlords might be able to get contractors out if they’re covered under home emergency cover.

Document the damage with photos and videos

When it comes to making a claim with your insurer for the cost of the damage caused by a flood, the more evidence of the damage you can provide through photos and videos, the quicker and easier the claim can be handled.

Implement your business continuity plan

As mentioned above, a business continuity plan may allow you to continue operating in some form even if your premises have been flooded, such as working remotely if your offices have become inaccessible.