Flood: A Universal Peril
Published: 22-Mar- 2011 | Category: Resources
Following heavy storms this winter, many parts of the U.S. are now bracing for flooding as the snowfall melts. NOAA forecasters are warning the worst is yet to come as almost half the country has an above-average risk of flooding over the next several weeks, according to the annual spring outlook released by NOAA’s National Weather Service.
Flooding is the number one natural disaster in the United States, affecting thousands of homeowners and businesses annually. Floods are typically caused by excessive rain or snow fall, tropical storms or hurricanes, dam or levee failure, flash floods, and construction/development issues, among other causes.
Flooding is a universal peril that can have dramatic consequences for businesses of all types. One out of every four businesses that close their doors during a disaster—such as a flood—never reopen them, according to FEMA. Even if the damage is not severe, loss of or damage to product inventory, raw materials and/or essential records and files or power outages may delay the return to normal operations. It is essential that all businesses, regardless of location, prepare for and protect themselves against the risk of floods.
While there is no way for a company to completely remove the threat of a flood occurring, there are several low-cost mitigation techniques a business can employ before, during, and after a flood that may help minimize the impact on business operations.
Before a Flood
- Avoid building in a flood prone area.
- If location is in a flood prone area, contact local government authorities—and the Army Corps of Engineers, where possible—to ensure compliance with local building codes and to see if mitigation efforts (i.e., levees, floodwalls, etc.) exist in the community.
- Build with flood-resistant materials, such as concrete walls, metal doors, and metal, water-proof storage cabinets.
- Reinforce the structure and elevate the building’s main breaker, fuse box, and utility meters.
- Remove valuables and essential records from basements or other flood prone areas; store above expected flood levels or off-site.
- Install an emergency generator in case of power outages, which can be used to speed the recovery process and restore business operations more quickly.
- Create a disaster contingency plan and share with all relevant employees and business contacts.
- Backup vital company records, ideally at an off-site location.
- Purchase flood insurance. Typical commercial property policies exclude coverage for damage caused by flood; consider the National Flood Insurance Program (NFIP) or another risk transfer alternative.
- Identify colleagues who will be responsible for gathering the data necessary in the event of an insurance claim, and provide them with adequate training on what records will be required. Appoint a key contact to communicate with your claims adjuster.
During a Flood
- Notify your insurer(s) and Marsh as soon as possible of the event.
- Keep abreast of developments via the National Weather Service, local community agencies, and/or local news.
- Where time permits, move raw goods, inventory, files, and other essential items (i.e., computers) away from ground or basement levels and to an upper floor.
- Stay clear of streams, brooks, and other areas prone to flooding.
- When instructed to do so, turn off utilities at the main switches.
- Enact disaster contingency plan and alert all employees and business contacts.
- Identify and capture all costs associated with your insurance claim. Examples include protection and preservation, temporary repairs and replacement, and extraordinary and expediting expenses.
After a Flood
- If there is significant damage to the structure, turn off the electricity and other utilities, regardless if the power is on or off in the community. Turn it back on when the structure is dry enough.
- Take caution when entering buildings to avoid hidden damage, such as a weakened foundation.
- Assess any damages and contact insurance claims personnel as soon as possible.
- Record evidence of damage, including photographs and/or video.
- Establish a flow of communication between employees, insurers, and claims professionals.
One of the most important mitigation strategies businesses can take to protect themselves against flood—especially those in flood-prone areas—is to purchase insurance. In the U.S. most flood insurance is sold through the NFIP, the government-backed national flood insurance program. NFIP is a federally-funded program that provides coverage for building and contents for both commercial and residential buildings. There are two types of risk: moderate-to-low and high risk locations. Structures located in the moderate-to-low hazard areas may qualify for the NFIP Preferred Risk Program, which offers the lowest available premiums in these areas.
Marsh’s Flood Service Center has the ability to place up to $16 million in limits in excess of the NFIP, including coverage for business interruption. Since many of the costs associated with such an event can include costs to resume business operations—or the potential income lost as a result of interrupted business operations—many companies benefit from such additional coverage. Alternative programs options are also available; coverage is comparable and prices are competitive with the NFIP and most businesses qualify for coverage. Coverage availability and pricing varies and is based on each individual insured’s portfolio.
If you face flooding concerns, Marsh’s Property Practice and Flood Service Center experts can work with you to determine the insurance and risk management options that best fit your needs. In addition to coverage available through the NFIP, many businesses can also benefit from business interruption insurance and other alternative program options. In addition, Marsh’s dedicated property and claims professionals are experienced in successfully handling flooding claims and can assist you in all facets of the process, from pre-loss preparation strategies through the settling of a claim.
To learn more, please contact your local Marsh representative or:
Flood Service Center Practice Leader
+1 210 691 4106
U.S. Property Practice Midwest Zone Leader
+1 313 393 6757
US Property Practice Northeast Zone Leader
+1 212 345 3626
May 20, 2013 | Views: 7
On May 15, 2013, an estimated 16 tornadoes ripped through North Texas, killing at least six people and injuring many more. On May 20, 2013, an estimated 26 tornadoes were reported ... Read More...
May 16, 2013 | Views: 1475
Power outages caused by earthquakes, snowfall, cyclones and other natural hazards, as well as power grid issues are not uncommon. Given the likelihood that your organization will b... Read More...
May 14, 2013 | Views: 184
Power outages and other service interruptions — whether caused by natural hazards or other factors, such as stresses to power grids — can disrupt businesses’ supp... Read More...
May 14, 2013 | Views: 232
The 2013 Atlantic hurricane season is approaching quickly, with several forecasters predicting an active one. Read More...
May 13, 2013 | Views: 38
Major storm systems such as Superstorm Sandy in 2012 have the potential to create significant environmental challenges. Read More...
May 13, 2013 | Views: 55
Flooding — the most common natural disaster in the United States — affects thousands of homeowners and businesses annually. Typical causes of flooding include hurricane... Read More...
February 08, 2013 | Views: 834
With a nor'easter approaching the same region hit by Superstorm Sandy, now is the time to ensure you are prepared snow and ice. Read More...
November 20, 2012 | Views: 739
Any structure or material that has been wet for more than 48 hours can potentially be impacted by mold. Read More...
November 20, 2012 | Views: 758
Insureds that confirm or suspect pollution releases should examine their policies and provide notice to carriers. Read More...
November 20, 2012 | Views: 688
Managing recovery from Sandy will require project management time and proactive leadership. Read More...
November 16, 2012 | Views: 833
A significant issue in determining how coverage will apply will be the distinction between flood and storm surge within a particular policy. Read More...
November 14, 2012 | Views: 767
The Construction Consulting Practice, part of Marsh Risk Consulting’s Financial Advisory Services group, offers specialized reconstruction project management solutions follow... Read More...
November 02, 2012 | Views: 1182
Recovery from a catastrophic event such as Superstorm Sandy can be essential to your company’s finances, operations, and overall success. Read More...
November 01, 2012 | Views: 924
Our panelists will discuss the key insurance and recovery issues you may need to address in the wake of Sandy. Read More...
October 30, 2012 | Views: 1889
The latest resources and guidance for super storm Sandy. Read More...
October 29, 2012 | Views: 804
Our Real-Time Crisis Management team has extensive hands-on experience successfully supporting clients during some of the most severe, high-profile events. Read More...
October 25, 2012 | Views: 3244
Tips for action before, during, and after Hurricane Sandy. Read More...
October 24, 2012 | Views: 2892
Marsh’s local dedicated claims teams and client executives can support clients in their business recovery if they are affected by a hurricane or other disaster. Read More...
August 25, 2012 | Views: 4477
Recovery from a catastrophic event such as a hurricane can be essential to your company's finances, operations, and overall success. Marsh's Forensic Accounting and Claims Services... Read More...
August 24, 2012 | Views: 1226
Marsh is monitoring Isaac and has property risk, forensic accounting, business resiliency, and crisis experts poised to respond if necessary. Read More...