US mid-market corporations are largely unaware of and unprepared for the dangers their companies face from flooding, in response to a brand new report from Chubb.

As a way to measure companies’ perceptions of flood threat, Chubb surveyed insurance coverage brokers, who the corporate mentioned have been effectively positioned to grasp their purchasers’ consciousness of flood dangers and the accessible insurance coverage choices.

In keeping with the report, 85% of mid-market corporations mistakenly consider their property insurance coverage covers some, most, or all types of flooding. The report additionally discovered that solely a small minority of companies know that flooding is the commonest – and the most expensive – pure catastrophe.

“Taken collectively, the survey outcomes present a extreme underestimation of the gravity of business flood threat and underscore the pressing want for schooling across the severity and frequency of floods, even in historically low-risk areas,” Chubb mentioned.

Floods within the US have value taxpayers greater than $850 billion since 2000 – two-thirds of the price of all pure disasters, Chubb mentioned.

“Flood threat is much extra pervasive with the growing frequency and severity of excessive climate occasions,” mentioned Louis Hobson, senior vp of North America flood insurance coverage at Chubb North America. “This report exhibits that far too many corporations are unknowingly uninsured in opposition to flood dangers. It’s incumbent on insurance coverage carriers and brokers to teach {the marketplace} and guarantee organizations perceive the dangers of flood and the protections accessible.”

Key findings of the report embrace:

• 85% of corporations consider their property insurance coverage covers some, most, or all forms of flooding. Fifty-six p.c of brokers surveyed mentioned that organizations they serve don’t buy flood insurance coverage as a result of they consider it’s already coated of their industrial property coverage. The overwhelming majority – 84% – reported that the majority of their purchasers don’t buy any flood insurance coverage
• The report revealed a widespread lack of awareness about flood threat. Sixty-nine p.c of brokers surveyed consider that solely a small minority of companies know that flooding is the commonest and costly kind of pure catastrophe. Almost half (45%) mentioned their purchasers don’t even request a quote for flood insurance coverage
• The report additionally discovered that there was a scarcity of consensus round defining the a number of causes of flooding, with essentially the most extensively held perceptions specializing in the overflowing of a physique of water (67%), inundation/heavy rainfall (56%) and surge/tidal waves (43%)

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The survey findings demonstrated that it’s pressing for the insurance coverage business to make clear flood protection particulars, Chubb mentioned. Companies must also concentrate on constructing resilience into their properties to assist mitigate the influence of flooding.

Hobson beneficial that companies take the next actions:

• Assess threat components that might influence their operations
• Search flood insurance coverage quotes to supply readability on what is roofed by industrial property insurers
• Make use of insurance coverage carriers’ instruments and expertise to construct resilience and mitigate flood publicity
• Make the most of loss-prevention companies, together with Web of Issues units that may assist predict and stop property injury
• Have interaction in common partnerships with insurers and brokers to adapt to the altering actuality of flood threat

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