Sometimes when I ask a client if they would like to extend their Business Insurance to include Flood cover, they might laugh and point out that they are on top of the hill or a few floors up in a building. However, if you combine Flood cover with Business Interruption cover, you may find you are then protected for when flood affects your suppliers or perhaps the inability to access your premises if a flood occurs nearby, even if your own premises are immune from floods.
We saw examples of this in the floods in January 2011 in Brisbane. Basement car parks of office buildings filled up with water. It resulted in some office buildings not being able to be accessed for some weeks despite no direct flood damage to their office. Many were uninsured for this event, but they could have been.
Business Interruption sections in Business Packs have additional benefits or extensions such as the following:
Prevention of Access
This benefit will pay for loss of income that results from an interruption to neighbouring properties which stops you using or accessing your premises business.
This extension pays for loss of income that results from an interruption of your business that is caused by insured damage such as flood to producers or suppliers of electricity, gas, water, sewerage or communication services, used by the business.
At Customers, Suppliers or Other Premises and Property
You may have major customers or suppliers that could be susceptible to the risk of flood too. You can actually specify or name those companies on the policy and if they have a flood event and as a result interrupt your business. If they cause you a loss of income, you can claim this in the Business Interruption section of your policy.
With some insurers, if you forget to specify suppliers or customers, you may still be able to claim up to 20% of the sum insured for loss of income that results from an interruption of your business.
Some insurers may also cover for loss of income as a result of flood damage to documents and electronic data files belonging to or held in trust by you while in transit or while at premises not occupied by you. This includes computer installations including ancillary equipment and data processing media utilised by you.
Who knows where your cloud files are kept? Also property stored at any premises not occupied by you, including freight forwarders or while in transit outside of the premises occupied by you along with roads, bridges and railway lines over which stock, components and materials are conveyed to and from the premises.
If this causes a loss of your normal turnover causing a major disruption to cash flow putting your business under severe strain, you may be glad you chose to add the Business Interruption section along with Flood cover even if you are at the top of the hill.
Please talk to us if you would like to discuss these covers further. Another example where our expert advice may just save you!