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Risk in Context

Protecting Your Business Before and After a Flood

Posted by Duncan Ellis July 01, 2016

The floods that devastated parts of West Virginia have claimed dozens of lives and ravaged several communities. Experts say the floods — which were declared a federal disaster — were the state’s third deadliest on record.  As the economic toll mounts and rebuilding begins, keep these recovery, risk mitigation, and insurance considerations in mind.

Recovering From a Flood

These five steps can help you to keep employees safe and get back up and running as quickly as possible:

  1. Notify employees and all critical stakeholders of next steps.
  2. Be aware of the safety of the community’s water supply and avoid floodwaters, which may be contaminated or may be electrically charged from power lines. Clean and disinfect all wet equipment.
  3. Be aware where floodwaters have receded as roads may have weakened.
  4. Implement your disaster recovery plan, and monitor local authorities.
  5. Contact your insurance advisor if you have ingress/egress, civil authority, service interruption, or direct physical damage impacting your locations. 

Before a Flood

Even if you were unaffected by the West Virginia floods, they serve as a reminder of how fast flooding occurs and of the need for preparation. Before a flood:

  1. Have an emergency communication plan in place. Pre-record a voicemail message and consider redirecting business phones to other lines or services.
  2. Have all employee, vendor, and client contact information on hand.
  3. Locate gas mains and electrical shut-offs. Prevent floodwater from backing up into sewer drains; use plugs or install flood vents or flood-proof barriers.
  4. Identify meeting place(s) and time(s) for key employees.
  5. Review insurance policies to verify coverage, deductibles, and sublimits, and update disaster recovery procedures.

Flood Zones

It is important to know how your buildings are located in relation to the Federal Emergency Management Agency (FEMA) determined flood zones. Particularly for buildings in Special Flood Hazard Area (SFHA) zones A and V, insurers typically apply smaller limits/sublimits and other policy restrictions.

Knowing what zone your building is in can help you make decisions around deductibles, sublimits, and in some cases, to consider excess flood insurance limits over what your basic property policy provides. National Flood Insurance Program (NFIP) policies also may fit well into your flood insurance management strategy as complement to your basic property policy.

Many aspects of flood mitigation and insurance depend on your unique circumstances. Implementing such steps and reviewing your flood insurance program can help keep your employees safe, minimize property damage, and help get your business up and running faster.

Related to:  Property , Flooding

Duncan Ellis

Duncan is a managing director resident in the New York office and is the leader of Marsh’s US Property Practice.