Flood insurance uncertainty a concern to businesses :

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Businesses seeking flood insurance could face greater uncertainty and prohibitively expensive insurance premiums in just four months? time, experts warn.

The British Property Federation has called for urgent action to create a new settlement between Government and insurers, warning that the end of an agreement that guarantees near universal provision of flood cover could leave thousands of businesses facing unaffordable bills.

The existing ABI/Government Statement of Principles between Government and the Association of British Insurers is due to end in June 2013, without any sign of a suitable alternative. The BPF said that the uncertain future of flood insurance will hit businesses from July 2012 as insurance cover starts to be renewed that covers the period that includes June 2013.

Liz Peace, chief executive of the British Property Federation, said: ?This is a huge issue that is not getting the focus it needs, and time is running out. Its impact will be felt not only by our industry, but also banks and mortgage lenders. Uninsurable property may be difficult to sell; banks and mortgage lenders may not wish to lend on properties in flood risk areas. Bank covenants and lease obligations may not be met, making it easier to prematurely end them.?

Nick Starling, director of general insurance at the ABI, said: ?Insurers are determined that flood insurance remains as widely available and as competitively priced as possible after the current Statement of Principles agreement with the Government ends in June next year. This can only happen if the Government agrees with the industry a new, long-term and sustainable flood insurance model ? and the need for that agreement is urgent. The current agreement is well past its best-by date as it distorts the market for both consumers and insurers. This is why we need a new approach, based on some form of pooling arrangement, to ensure that flood cover remains available to those at higher risk?

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Source: http://www.britishsme.co.uk/2012/03/22/flood-insurance-uncertainty-a-concern-to-businesses/

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