Commercial Flood Insurance Hub
Commercial Flood Insurance: A Guide for Property Owners, Landlords and Managing Agents
Flooding has become one of the biggest challenges facing commercial property owners across the UK. While flooding has always been a consideration for properties close to rivers or the coast, today’s risks are far broader. Surface water flooding, overwhelmed drainage systems and frequent extreme weather events mean properties that have never flooded before may now be considered a greater insurance risk.
At the same time, the commercial insurance market has become more cautious. Some property owners have seen premiums rise sharply, others have had flood cover restricted or removed altogether, while some have struggled to obtain quotations at all.
If you’ve found yourself in that position, don’t assume you’ve reached the end of the road. Every insurer assesses flood risk differently, and specialist brokers, like Greenfield Insurance, often have access to insurers that aren’t available through comparison websites.
This guide explains how business flood insurance works, what affects premiums, who needs cover and what your options may be if obtaining insurance has become more difficult.
What is commercial flood insurance?
Commercial flood insurance helps protect businesses and commercial property owners against damage caused by flooding. Depending on the policy, coverage may include:
- Damage to the building
- Fixtures and fittings
- Business equipment
- Stock
- Loss of rental income
- Business interruption
- Alternative accommodation (where applicable)
- Professional fees following a claim
- Debris removal and clean-up costs
The exact cover varies by insurer, so it’s important to choose a policy that reflects how your property is used.
Does my business need flood insurance?
Commercial flood insurance isn’t only relevant to businesses operating beside rivers. Suitable cover may be important for:
- Commercial landlords
- Shops and retail premises
- Offices
- Industrial units
- Warehouses
- Mixed-use developments
- Blocks of flats
- Residential landlords
- Property investment companies
- Managing agents
- Resident Management Companies (RMCs)
- Freeholders
Even properties with no history of flooding may be affected by changing flood assessments or local infrastructure issues.
Commercial flood insurance in London
London presents unique challenges.
Although many people associate flooding with the River Thames, surface water flooding has become an increasing concern across many parts of the capital.
Some insurers have become more cautious when assessing commercial properties in certain areas, making specialist advice increasingly valuable.
Looking for flood insurance for a London commercial property? Read our Commercial Flood Insurance in London guide, or speak to Greenfield Insurance about your property and the coverage you’re looking for.
Why is flood insurance becoming more difficult to obtain?
Many property owners are surprised when flood insurance suddenly becomes more expensive or difficult to arrange. There are several reasons why this is happening.
Frequent extreme weather
Periods of heavy rainfall are becoming more frequent, leading to an increase in flood claims from both river and surface water sources.
Better flood-risk modelling
Insurers now use far more detailed mapping and predictive technology than they did even a few years ago. Rather than looking purely at a postcode, they may assess:
- Elevation
- Distance from rivers or watercourses
- Surface water flood modelling
- Previous claims
- Local drainage infrastructure
- Historic flood data
- Property construction
Rising claims costs
Flood damage can take months to repair and is often among the most expensive types of insurance claims. As repair costs have increased, insurers have become more selective about the risks they’re prepared to accept.
Parametric flood insurance
Traditional flood insurance pays out after damage has been assessed and a claim has been validated. While this provides valuable protection, the claims process can take time, particularly after a widespread flood event, when insurers are handling a high volume of claims. Parametric insurance works differently.
Instead of paying out based on the cost of repairing damage, it pays a pre-agreed amount when a specific flood-related trigger is met. This trigger is set by you at a point exceeding an agreed threshold or floodwater reaching a predetermined level at your premises.
Because the payout is linked to measurable data rather than a detailed loss assessment, claims for business premises can often be settled much more quickly, which can be invaluable for business owners.
FloodFlash: An Example of Parametric Flood Insurance
One of the best-known providers of parametric flood insurance in the UK is FloodFlash. Rather than assessing damage after a flood, FloodFlash uses internet-connected flood sensors installed at the insured property. If floodwater reaches a pre-agreed depth, the policy automatically pays out the agreed amount, often within a matter of days.
Does Flood Re cover commercial properties?
Flood Re was introduced to help eligible homeowners access affordable flood insurance, but it doesn’t apply to all property types. Most commercial buildings, as well as many landlord-owned properties and blocks of flats, fall outside the scheme.
If your property isn’t eligible, it doesn’t necessarily mean flood insurance isn’t available. It means we need to arrange cover through the wider insurance market.
What affects the cost of commercial flood insurance?
Every insurer assesses flood risk differently, but common considerations include:
Previous flood claims
Insurers will usually want to know:
- When flooding occurred
- The cause of the flooding
- The cost of repairs
- Improvements made since
A previous flood claim doesn’t automatically prevent insurance from being arranged.
Premises within Flood Zones
Flood Zones 1, 2, and 3 indicate flood probability, but they’re only one of the factors insurers consider. Many commercial properties within higher-risk flood zones continue to obtain suitable insurance.
Property type
The type of building can influence underwriting. Examples include:
- Offices
- Retail units
- Warehouses
- Blocks of flats
- Mixed-use developments
Each presents different risks.
Construction
Insurers may also consider:
- Building age
- Construction materials
- Basement accommodation
- Ground floor layout
- Rebuild cost
Occupancy
Whether a building is occupied, vacant or undergoing renovation can also affect premiums and policy conditions.
Can I still get insurance if my property has flooded before?
Yes. Many owners assume previous flooding means they can no longer obtain insurance, but that’s often not the case. Instead, insurers will usually consider:
- How long ago did the flooding occur
- The cause
- Improvements made afterwards
- Whether flood resilience measures have been installed
- Local flood defence improvements
Because every insurer approaches previous claims differently, it’s often worth seeking specialist advice before assuming cover isn’t available.
What are Flood Zones?
The Environment Agency classifies land according to the likelihood of flooding. Although insurers use additional data, flood zones remain an important part of the underwriting process.
Flood Zone 1
Low probability of flooding.
Flood Zone 2
Medium probability.
Flood Zone 3
High probability.
Remember, being located in Flood Zone 2 or 3 doesn’t automatically mean insurance is unavailable.
What happens if your insurer removes flood cover?
It’s becoming increasingly common for insurers to:
- Remove flood cover
- Introduce higher excesses
- Increase premiums
- Decline renewal altogether
While this can understandably be worrying, it doesn’t necessarily mean suitable insurance can’t be found elsewhere. Different insurers have different underwriting criteria, and Greenfield Insurance often has access to insurers that aren’t available through comparison websites.
Has your insurer removed flood cover?
Being declined by one insurer doesn’t automatically mean suitable cover isn’t available elsewhere. Speak with Greenfield Insurance to discuss your options.
Flood insurance for landlords
Landlords often have additional considerations beyond simply insuring the building. Policies may include coverage for:
- Buildings insurance
- Loss of rent
- Alternative accommodation
- Property owners’ liability
- Flood damage
- Accidental damage
The right policy depends on how the property is occupied and managed.
Flood insurance for blocks of flats
Blocks of flats require specialist insurance arrangements. Policies may need to cover:
- The building
- Communal areas
- Shared facilities
- Multiple leaseholders
- Resident Management Companies
- Freeholders
- Managing agents
These are often far more complex than standard commercial property insurance.
Flood insurance for managing agents
Managing agents are often responsible for arranging insurance on behalf of freeholders or management companies.
Finding appropriate flood cover may involve balancing premiums, policy wording and excesses while ensuring adequate protection for all parties involved.
Need advice on commercial flood insurance?
If you’re reading this guide because flood insurance has become difficult to obtain, you’re not alone.
Perhaps your insurer has removed flood cover at renewal. Maybe your premium has increased significantly, or you’ve been told your property falls outside Flood Re. Whatever the reason, it doesn’t necessarily mean suitable cover isn’t available.
At Greenfield Insurance, we work with a wide panel of insurers to help landlords, commercial property owners, freeholders and managing agents find appropriate cover for a wide range of properties, including those that can be more difficult to insure.
Whether you’re looking to insure a single commercial premises, a block of flats, or an extensive property portfolio, we’ll take the time to understand your circumstances and explore the options available to you.
Frequently Asked Questions
Can I insure a commercial property in a flood-risk area?
Yes. Many commercial properties in flood-risk areas can still obtain insurance, although premiums, excesses and policy terms may vary.
Can I get insurance if another insurer has declined me?
Yes. Different insurers assess flood risk differently, so being declined by one provider doesn’t necessarily mean suitable cover isn’t available elsewhere.
Will previous flooding stop me from getting insurance?
Not necessarily. Previous flooding is one factor insurers consider, but they will also look at the circumstances surrounding the claim and any improvements made since.
Does Flood Re apply to landlords?
Many landlord-owned commercial properties and larger residential buildings fall outside Flood Re, although each property should be assessed individually.
What information will insurers need?
Typically, they’ll ask about:
- Previous flood claims
- Property construction
- Building use
- Occupancy
- Flood history
- Sum insured
- Any flood resilience measures
Providing accurate information helps insurers assess your property fairly.
Continue reading
Commercial flood insurance can seem complex, particularly if you’ve previously been declined cover or your property falls within a higher-risk area. However, every insurer assesses risk differently, and specialist advice can often uncover options that aren’t immediately obvious.
The guides below explore each topic in more detail and can help you better understand the options available.
