PIONEERING FLOOD INSURANCE WITH FLOODFLASH
Over recent years the amount of damage caused by flood water has increased to such an extent that the government has even set up an insurer called FloodRe to take the risk where insurers won’t. Unfortunately for small firms, its remit excludes business customers, even small businesses who live on site.
FSB Insurance Service has been looking into ways these businesses can protect themselves from flooding since before we officially launched in February 2018. We have released articles discussing Business Continuity Planning, Flood Prevention Techniques and Loss Recovery Insurance to help in the event of a claim. We also partnered with a special scheme underwritten at Lloyd’s to help businesses in high-risk areas acquire flood insurance if they weren’t able to get cover elsewhere.
This year we’re trialing a partnership with a brand new event-based insurer called FloodFlash who may be one of the most exciting disruptors in the flood insurance industry we’ve ever seen – and they’re also members of FSB!
What are the benefits?
FloodFlash is pioneering a scheme in which businesses can fix a sensor to their outer walls, which will detect the water levels at their premises. FloodFlash and the business will agree what flood level the payment is triggered by and in the event it happens, FloodFlash immediately makes a full payment of the agreed compensation which can be spent on anything the policyholder chooses.
As a business, you can adjust the depth and settlement amount to make the policy work for you. For example, you could decide to elevate stock or equipment which might allow you to select a greater trigger depth and a more affordable premium.
*note this is an illustrated representation of the quote process and does not reflect exact quotes
The sensor, which is fitted to the external wall of the property, provides real-time data feedback to FloodFlash and is fully flood and tamper resistant. It is installed by one of FloodFlash’s trained engineers.
If a flood occurs and the sensor detects that the depth has exceeded the pre-agreed level (no lower than 20cm), the whole sum of agreed compensation is sent to you.
This aims to improve the experience of making a claim, and simplify the process so that if the worst happens, you can focus your efforts on more immediate concerns than a lengthy claims process. It also removes confusion about what’s included and what’s excluded.
Also, unlike other insurance policies, this is not a traditional ‘indemnity’ policy designed to put you in the same financial position as before. It is an agreed lump sum (from £10,000 to £200,000) that you can use for anything-
- To replace damaged stock
- To maintain cash flow at a time of critical business interruption
- To cover an increased excess imposed by an insurer because you are in a flood area
- To pay for clean-up and to make your property more resilient to flood damage
- Possibly to fund a move to a different location
- or even a holiday to recover from the stress of having to handle a flood!
What are the risks?
Once agreed, the compensation sum cannot be increased or decreased until the policy’s renewal date the following year. The same applies to the ‘trigger depth’ of flood water at which the compensation is sent to you.
The FloodFlash sensor is extensively tested and manufactured here in the UK, but if by chance is does fail then FloodFlash will take other evidence such as high water marks, the meteorological office reports and interviews with your staff to establish whether you are due the compensation.