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Risk in Context

Not Just A Coastal Risk: Learning From West Virginia’s Inland Flooding

Posted by Ian Macartney July 06, 2016

Recent flooding in West Virginia claimed at least 20 lives and devastated communities, mostly due to historic downpours and  overflowing rivers — commonly known as inland flooding. Such events are reminders of the increasing frequency and effects of inland flooding. Understanding how your property may be affected by inland flooding can help you mitigate and insure against the next catastrophic flood.

Protecting Your Operations

Inland flooding is challenging to predict; generally, forecasters can tell you the likelihood of rain, but not necessarily the volume. Loss prevention and flood mitigation are key parts of protecting your operations. Working alongside communities, businesses in areas prone to inland flooding should consider:

  • Building flood walls.
  • Elevating properties and equipment.
  • Installing pump stations.
  • Anchoring structures to foundations.
  • Creating water diversion channels.
  • Moving operations away from rivers, streams, and creeks.

The more you do to mitigate potential flood losses, the better you can protect your business. Insurers also look favorably on mitigation efforts in your risk profile, which could positively affect premium rates.

To better understand inland flooding risks, you should also consider:

  • Business impact analysis: A critical assessment of the potential disruption to a business, its revenue, and the length of time to recover.
  • Flood modeling: A tool to help you understand the potential impact of rainfall and other sources of flooding.

Flood Insurance

Insurance is a crucial part of protecting your business. A thorough understanding of how your flood insurance works and what it covers is critical.

For example, ensure that the National Flood Insurance Program (NFIP) or private primary flood insurance that you purchase is sufficient. These policies tend to offer coverage for mudflow, but not landslides — a  risk related to inland flooding. If there's the potential for landslides or other risks from flooding, you should look for other types of coverage, including:

  • Difference-in-conditions (DIC) insurance: Typically available to large commercial businesses, this policy is designed to provide additional limits and coverage not found in standard property insurance policies.
  • Excess flood insurance: Augmenting NFIP and primary private flood coverage with excess flood insurance can provide broad coverage above available NFIP limits. Excess flood coverage can also protect against business interruption losses, which can be a major issue after a flood. Check to see if business interruption coverage is either part of your commercial property, excess, or private primary flood policy.

The sheer force of rainfall, combined with a river, stream, or creek, can produce tragic results, as in West Virginia. Work closely with your insurance advisor to ensure that your policies work hand-in-hand to cover your risks and needs.

Related to:  Flood Services , Flooding

Ian Macartney

Flood Insurance Services Practice Leader