Flood Guidance for Small Businesses

As a small business owner, you’re probably an expert on fire regulations, with extinguishers and alarms covering every spare bit of wall space. If you employ staff, you might even have appointed a warden or practised a drill. But did you realise your business is more likely to be flooded than burned down? Water damage can be devastating to your enterprise, particularly if you’re under-insured.

It’s something all small businesses need to take seriously. Floods are now the most common of all disasters and are only set to get worse as climate change takes hold. Take last year for example. The wettest summer since records began led to widespread flooding, affecting 7,000 businesses and leaving many facing financial ruin.

The clean-up operation in flood-hit parts of Britain may be coming to a close, but the threat of flooding hasn’t gone away. The Environment Agency estimates five million people are still at risk.

However, the summer’s problems have provided a wealth of information on what to do should the worst happen again. In fact, the Environment Agency claims that if you take action to prepare for flooding you can save up to 90% on the cost of lost stock and equipment.

So what do you need to do to ensure your business is protected in a flood? MORE TH>N BUSINESS has compiled a guide with everything you need to know. Follow it and find out about:

• Prevention – assess your risk, then formulate a flood plan involving your staff.
• Insurance – use online tools to check you’re adequately insured, then find out how to make a claim.
• What to do in a flood – how to secure your property and keep your business running.
• What to do after a flood – cleaning up your property with the minimum of fuss.

Prevention
1. Assess your risk
Unfortunately, all businesses are at risk of flooding, no matter where they are. Even if you’re not close to a river or the sea, you could still be affected by rising ground water, burst water mains, sewer overflows or rainwater running off hillsides. Assess your risk now by looking at the Environment Agency’s flood map.

The Environment Agency has identified which type of businesses will be hardest hit. It found that high street shops are at particular risk of financial loss due to their high levels of stock, often crammed into a small space. If your company relies heavily on technology you could also be badly hit, as cabling and electricity supplies are often located below ground level. You’re also particularly vulnerable if you have a warehouse with a stock room – especially if you’re on the ground floor and have nowhere to stack goods out of the reach of floodwaters.

If you decide you’re at a particularly high risk of flooding, the good news is that there are various products available to reduce the risk of water damage, including flood barriers and door and window seals. Read about them on the Business Link flood guide.

And for more information on how to protect your business from water damage, see the comprehensive Risk Management Guide on MORE TH>N BUSINESS.

2. Prepare a plan
Arranging in advance what you’ll do in a flood won’t just help you feel prepared – many insurance companies will actually reduce your insurance premiums if you have a contingency plan in place. The Environment Agency has a great flood plan template you can download. But before you start writing, there are some points you need to consider.

According to the MORE TH>N BUSINESS Water Damage Risk Management Guide, a good plan need not be complicated, but a first step would be to list everything you can think of that could go wrong, then show your list to someone you trust and ask if they can think of anything you’ve missed.

The plan should also include a list of important contacts (for example any customers and suppliers you need to contact, or the mobile phone numbers of key members of staff) and should also have information on protecting your property (such as instructions on how to back-up data, or a list of items which should be moved to a place of safety). Once you’ve formulated your plan, spend time informing and training your staff and do several dummy runs, as if you were practising a fire drill.

Review your insurance
Don’t assume your standard business insurance means you’re properly covered in the event of a flood. It’s easy just to focus on damage to your property and possessions, but don’t forget that the disruption involved could affect your business for months on end. You’ll need a policy that covers you for business interruption – something you may have to buy in to, although how much this costs will depend on your type of business, how important your premises and location are and the length of the disruption, so discuss this with your insurer.

Business interruption insurance could be invaluable in keeping your business trading whilst the flood damage to your premises is repaired. When considering your insurance needs you should consider how your business would cope if there was no or restricted turnover while your premises are drying out or being repaired. This is where business interruption insurance could help.

Keep your policy documents somewhere safe – but make sure you can find them easily in the event of a flood. To make putting in a claim as straightforward as possible, it’s a good idea to keep an inventory of all your important possessions, perhaps even taking photographs for further evidence.

In the event of a flood, contact your insurer immediately. They may be able to give you advice and a list of recommended tradesmen and may even be able to arrange an interim payment to cover you for any emergency repairs.

What to do in a flood
In any emergency, your number one priority is the health and safety of you and your employees. Once everyone’s safe, you should make sure your premises are as secure as possible to deter looters. Lock up properly and take away as many valuable items as you can (although you should check with your insurer whether they’re covered once they’re away from your property).

This is where your flood plan really comes into its own, as a little bit of planning can really help you avoid financial loss caused by damage to stock or computers. Once you know a flood is coming, get staff to move important items to upper floors, or place them on tables to keep them out of reach of flood waters. Move vital documents to a safe place and make sure any computer data is backed up. Photograph the damage to assist any claim you make.

Ensure all power and gas supplies are turned off. Remember that flood waters may be contaminated by petrol or chemicals, so avoid contact with them and don't use naked flames.

You’ll want to get your business up and running again as soon as possible, so keep your employees in the loop and take time to call important customers. A good way to do this is to update your website with progress reports. Keep the news upbeat, but be realistic – don’t say it’s business as usual if this is not the case.

While business interruption insurance is a good way to cover any shortfall in your profits should you suffer a great deal of water damage, it’s also a great idea to have a continuity plan in place. Business Continuity is an approach to controlling risk, and a great way to help recover after any serious incident. Not sure how to go about it? Download a Business Continuity Management Guide from MORE TH>N Business.

What to do after a flood
First check that your property is safe to enter. Your building may look safe, but large amounts of water can damage its structure, and you could be at risk of an electrical shock if the mains electricity is still running.

When you can enter your property safely, start looking at what needs to be replaced and what can be salvaged. While it may be quicker to replace items, don’t throw anything away or take anything for repair without checking with your insurance company first.
You will want to start trading again as soon as possible, so look at your flood plan and assess any suppliers or customers you need to contact. Your plan should also include suggestions for temporary premises from which to trade.

Before you start any major repairs to property, make sure flood waters have definitely receded by monitoring weather reports and flood warnings. When you’re confident they have, you’ll need to clean and disinfect everything that has come into contact with the flood waters to avoid infection, and open doors and windows to help everything dry out.

MORE TH>N BUSINESS customers affected by flooding can call the 24 hour helpline 0800 300 699