Climate change remains a chronic threat to commercial properties

He told delegates: “Extreme weather is unfortunately on the march around the world. The impacts of climate change are coming faster and more fiercely than previously predicted.”

As an example of the effects of climate change, he noted recent floods, fires and record-breaking temperatures, recommending that businesses build resilience into their practices to help companies and the working economy thrive as the climate inevitably changes, saying: “Insurance is absolutely part of this agenda, communities must be able to protect themselves financially from climate risk.”

At the same conference, Aviva’s Chief Executive, Amanda Blanc, named flooding as the UK’s biggest risk. She said: “As an insurer, particularly for the UK, flooding is one of the biggest risks that we have faced over the past couple of years. We have to think about how we mitigate that.”

Co-founder and chief science officer, Ian Bartholomew, of the insurer FloodFlash, said: “Events like the floods that occurred in Northwich and London are a pertinent reminder of the ongoing threat from extreme weather … no one should rely on the efforts of DEFRA or the Environment Agency to provide full protection. Both Northwich and London have had huge amounts spent on flood defences over the years and yet many homes and businesses were damaged.”

FloodFlash’s Commercial Risk Report, published 3rd May 2022, reveals that 32.5% of retail properties and 20.7% of manufacturing, wholesale and logistics commercial properties in Britain are most at risk of flooding.

When businesses were surveyed about flooding risk, the area most concerned was the East Midlands, with 76% of respondents indicating their worry, followed by 66% of commercial businesses in London and Scotland. In terms of numbers, London is the region with the highest amount of commercial properties in the 200-year flood zone, followed by West Yorkshire and Greater Manchester.

On the plus side, the report reveals that many sectors have high levels of comprehensive flood insurance in place, including 80% of the hospitality sector, 80% of the manufacturing, wholesaling and logistics sector and 83% of the community services sector. This indicates that businesses are taking the threat seriously and taking steps to mitigate flood damage with appropriate insurance.

As insurance brokers, we cannot strongly emphasise the necessity of having adequate insurance to mitigate the effects of climate change. Many commercial properties in all sectors are potentially at risk, with many having already suffered the consequences of flooding. As events get more dramatic and more commonplace every year, it's essential to continually review such covers as buildings, contents, business interruption, and other sector-specific covers.

To discuss your commercial insurance needs and ensure you have adequate cover in place to help mitigate against flood, fire and other risks, please get in touch today - call us on 01992 703 000 or email insurance@mcdonaghs.co.uk

Sources:

Chronic Threat of Climate Change
UK's Retail & Industrial Sectors Face Biggest Flooding Risk
Aviva's Amanda Blanc Names Flooding Biggest UK Risk