While the UK has a reputation for its relatively mild, albeit rainy weather, at times it can become more serious. Some time ago, the UK experienced severe weather, leading to us receiving many enquiries from customers regarding commercial properties that suffered from flooding which caused water leakage, repairs and other losses.
With the prediction of future environmental and weather trends, the challenges faced by owners or lessors may become more severe. Therefore, we hope to point out some factors that should be taken into consideration when assessing your commercial property insurance. Commercial property building insurance is vital to protecting your property and assets from unexpected events such as severe weather and flooding.
Adequate Coverage
Make sure your policy provides adequate coverage for reconstruction or repair costs in the event of severe weather or flooding. Review your policy regularly to make sure it keeps pace with inflation and the current market value of your property.
Exclusions and Limitations
Pay close attention to the specific exclusions and limitations in your policy. Some policies may exclude certain types of weather-related losses or have limits on coverage for flood damage. For any ambiguous terms or provisions, seek clarification from your insurance provider.
Policy Extensions and Riders
Consider additional coverage options or policy extensions that specifically address severe weather and flood risks. This could include losses from business interruption, debris removal, temporary relocation expenses or storm-related power outages.
Maintenance and risk management
Minimize the risk of damage from severe weather by regularly maintaining your property. This may include inspecting and repairing roofs, gutters, and drainage systems, as well as ensuring proper insulation and waterproofing. Insurance companies may deny a claim if they believe the damage was caused by inadequate maintenance of the property.
Flood Risk Assessment
If your commercial property is located in a flood-prone area, it is crucial to assess the flood risk. Consider investing in a flood risk assessment to determine the likelihood of flooding and take appropriate precautions, such as installing flood barriers or elevating valuables above ground level.
Contingency Plan
Develop and regularly update an contingency plan that outlines steps to be taken before, during and after a severe weather event or flooding. These can include procedures such as evacuating people, shutting off utilities, securing the premises, and contacting your insurance provider to initiate a claims process.
Seek professional advice
Consider speaking with an insurance broker or risk management professional who can provide guidance on your specific commercial property and insurance needs. They can help you navigate complex insurance terms, identify potential coverage gaps, and ensure you have adequate protection against severe weather and flood risks.
Commercial Tenants
Make sure you understand your rights and responsibilities under your lease and building insurance policy. There are a large number of commercial tenants who are unaware of their responsibilities such as maintenance insurance for their commercial rental properties. We recommend that when signing a commercial lease, the maintenance and insurance terms should be clearly stated, and corrections and modifications should be made with the owner in a timely manner. After any damage occurs, check the terms of the lease promptly and take appropriate action.
Our thoughts
In summary, being proactive, well-informed and adequately insured will help reduce the hazards and challenges associated with severe weather and flood risks.
We recommend two reports from the Bank of England to readers interested in learning more about climate change and the insurance industry:
1) The impact of climate change on the UK insurance sector
2) Results of the 2021 Climate Biennial Exploratory Scenario (CBES)
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