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Flood Excess Insurance to relieve excess headache facing businesses in flood risk areas

27 July 2015

Businesses and commercial property owners located in high flood risk areas who are often faced with a high flood insurance excess, will welcome today’s announcement by Policy Excess that Flood Excess Insurance has now been expanded to include commercial properties

This specialist insurance policy provides businesses who will not benefit from the government driven Flood Re scheme with the opportunity to insure their excess through their insurance broker and alleviate the issues faced by a high flood insurance excess. This additional offering means that Flood Excess Insurance now encompasses all property lines including residential and landlords to ensure everyone has peace of mind should a flooding event occur at their premises.

Chris Netherton, Head of the National Flood School and Chief Executive of Policy Excess Limited is behind the development of Flood Excess Insurance said: “The Royal Institute of British Architects1 estimates that around 130,000 commercial properties in England are at risk from coastal or river flooding alone. Should the worst happen and a flood occurs, the task of finding a considerable sum of money to cover the insurance excess for repairs could have huge financial consequences particularly for small and medium sized businesses. Flood Re is a good thing but it doesn’t solve the ongoing problem for commercial properties that Flood Excess Insurance does which is should a flood take place those business owners will be covered and any damage paid for.”

The risk of flood damage in the UK is a growing concern with climate change leading to more severe and concentrated rainfall and for those located in areas considered to be high risk, insurance quotes with a flood excess of up to £25,000 are considered commonplace. Flood Excess Insurance can cover excesses of up to £50,000 as standard and importantly, it is a true ‘excess infill’ product. This means that if flood damage occurs at the Insured’s property, Flood Excess Insurance will cover the cost of the damage even if the total damage costs are less than the flood excess on the Insured’s commercial property policy.

Flood Excess Insurance has been developed to address the needs of businesses located in flood risk areas so should their property be flooded, rather than being faced with the challenge of footing a huge excess, they are covered and repairs can take place without impacting on their livelihood. Furthermore Flood Excess Insurance also counteracts any issues that might arise with obtaining a mortgage or selling that property.

Even after Flood Re is scheduled to come into effect in April 2016 businesses and commercial property owners, situated in flood prone areas who will not benefit from Flood Re, may find themselves having to pay a large flood insurance excess should the worst happen. Landlords with more than four properties and residential properties built after 2008 are also excluded from the Flood Re scheme.

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