In its response to a government consultation on the future of flood insurance, the British Property Federation (BPF) today warned under the current proposals thousands of SMEs may not have access to affordable cover.
While welcoming the proposed Flood Re agreement between government and the insurance industry to ensure residential property continues to have access to affordable cover, the BPF believes excluding SMEs – the backbone of the UK economy – from the proposals could lead to large hikes in insurance premiums and even some premises becoming uninsurable.
SMEs are generally more vulnerable to the effects of flooding compared to larger businesses that will have contingency plans and the negotiating strength to secure affordable insurance. SMEs will be left exposed to the full effects of flooding and the BPF has urged government to extend the Flood Re agreement to cover them.
Liz Peace, chief executive of the British Property Federation, said: “We appreciate priority has been given to ensuring the availability and affordability of flood insurance to the millions of homes across the country, but we are concerned SMEs find themselves excluded from the proposals.
“SMEs employ over 14 million people in the UK, and have already seen a marked increase in their property insurance premiums and excesses. Those in high risk areas will see the cost of their insurance increase considerably, and in some cases they may not be able to secure it at all unless government extends Flood Re.”
Flood Re works by providing a fund to offer homes at high flood risk who might otherwise struggle to find affordable insurance with cover at a set price. To fund this all home insurers are subject to a levy of an average of £10.50 a year.
