Aon Risk Solutions, the global risk management business of Aon plc has created Flood Secure Flex, a new call option for Flood Secure, to allow U.S. organizations to lock in pricing and terms for replacement flood coverage.
Flood Secure Flex secures flood capacity at a predetermined price for a nominal cost, providing organizations with greater flexibility as to when or if they decide to reinstate exhausted or eroded flood limits. The nonrefundable call option costs 10 to 20 percent of the policy premium and is based on the limit and policy term. When an organization decides to trigger the option, the balance of the policy premium is due immediately.
“Damages from Post-tropical Cyclone Sandy are still being assessed and clients do not know if their flood limits have been impaired,” said Rick Miller, chief broking officer, Aon Risk Solutions’ U.S. Property Broking Practice. “Flood capacity, especially for high hazard zones, is not unlimited in the market and replacement and reinstatement capacity may not be available to all due to losses stemming from Sandy.”
Flood Secure Flex provides up to $25 million in additional flood limits, both high hazard and traditional. Each risk is separately underwritten with policy terms up to one year.