Businesses affected by the UK floods could face months of waiting for their property to dry out before their insurance claims are settled
Businesses affected by the UK floods could face months of waiting for their property to dry out before their insurance claims are settled. However, Aon is urging companies to check their policies, which may allow interim payments for repairs and loss of revenue.
Donald Morgan, client relationship director at Aon, said: "Delays in claim settlement are a major frustration for companies, particularly in cases involving a loss of revenue. However, to reduce calls upon reserves or special short term bank facilities, insurance policies may allow for interim payments to assist with repair costs. Brokers, including our claims consultants, can negotiate these to help companies with cash flow when most needed."
John Bell, head of claims at Aon, has already seen claims coming in for over £1m and believes more commercial property has been affected than in Carlisle or the West Country floods. He said: "Most commercial policies will cover flood damage but, typically, flood losses take longer to settle as the property needs time to dry out before all damage can be identified. As soon as possible, businesses must identify the extent of the damage through qualified loss adjusters and then notify their insurer to negotiate settlement. Insurers and brokers will then work with specialists to help restore the property."
Warehouse owners in particular need to be aware of a flood-related policy exclusion which may prevent a claim being made. A likely policy condition will be that all stock is stored a certain level above the ground as failure to do so may prejudice a claim for damaged goods.
Donald continued: "For employers, the floods have highlighted the importance of effective crisis management and business continuity planning. For example, we activated our disaster plan by contacting each employee at our Sheffield office to ensure they only attempted to travel to work if safe."
