UK broker Alliance Corporate Risk Management is concerned that “with flooding having caused yet more devastation across the UK, …businesses are still not learning the lessons of previous flood disasters.”
John McLaren Stewart, the company’s Chief Executive, who took part In a forum held earlier this year to discuss flooding issues, noted that as of last “weekend, the Met Office [the UK’s weather service] had issued 200 flood warnings for across the UK, yet a great number of businesses may still have been insufficiently prepared to deal with the overwhelming effects.”
Alliance explained: “Flood damage can have devastating impact on a business’s ability to continue trading and in turn seriously affect cash flow. Some businesses may see their entire stock ruined, while damage to those in the hospitality industry could see companies lose thousands in their inability to service customers.”
While Stewart has “welcomed the introduction of a flooding action plan from the environmental secretary and was keen to be involved in the consultation of this issue,” he still “feels businesses must be encouraged to take their own proactive measures to protect themselves.”
He noted: “The country is becoming increasingly affected by flooding, and I cannot urge businesses strongly enough to put the necessary measures in place to protect their livelihood. Circumstances such as flooding, may be unforeseen, however, businesses should act now to ensure that they have solid loss prevention and disaster recovery plans in place to cover any eventuality.”
In the 2007 summer floods, some 44,600 homes were flooded and BIBA estimated that by December alone, the resulting costs were more than £3 billion [$5.3 billion]. It calculated around 27,000 claims from businesses in the period. It has now been estimated that this weekend’s flood damage could cost ‘tens of millions’ in repairing damage.
Stewart added: “At a time when companies are looking at cutting costs and making tangible savings, it would be all too easy to neglect issues of risk management and disaster planning. We would urge businesses – of all scale – to think very seriously about the long term cost involved in picking up the pieces when something goes wrong.”
Source: Alliance Corporate Risk Management – www.allianceweb.co.uk.
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