20/10/2014

By Jane Gibbons


Cast your minds back to last Winter and you may recall the heavy rainfall and flooding that plagued much of the UK. Many claim it is the worst winter for flooding and rainfall since the year 1766. Although the news reports covered stories of flooding impact in coastal areas and parts of Somerset, much of the country — including London and the South East, were also affected badly.

It is not just homes and families that felt the impact. Many thousands of businesses were hard hit and it was a great struggle to try and regain normal operations. Businesses that were affected include those with shop fronts or offices in the flooded locations. They lost a lot of stock and found it difficult to refurbish the premises after the big clean up. Many had to close their doors, whilst others tried to operate online or from a temporary location. This represents a direct impact of the flooding, however other businesses were also affected even if they weren’t located in the flooded zone — for example if suppliers or clients were located in the flooded areas, leading to delays of payments, deliveries and so on. The knock on effect was felt by many businesses throughout the chain.

According to the latest statistics from supply chain risk management company Amee, businesses lost £830m as a result of last year’s floods. Last year in Somerset, the financial impact of a single company reached £17,352 over a six week period on average. Unfortunately, those SMEs that were already in a weak financial situation before the flooding occurred suffered the most.

If you take a look at the data AMEE provide in their environmental blog, you will see that a potential 252,000 SMEs are located in high risk flooding areas, which represents 7% of the UK. These 252,000 businesses must prepare for the upcoming winter to safeguard themselves from the possibilities of flooding and bad weather damage or face the consequences.

In fact, 42,093 of SMEs that face both flood and financial risk are located in London, with the South East accounting for 15,592 businesses classed as ‘at risk’. The data also shows that 10,888 are located in North West England, and 9,833 in the North. If we look at the figures in London when it comes to those businesses facing financial risk already, 27.7% of businesses draw a red flag.

What we can take from this data is that it is very important for businesses to protect themselves sooner rather than later. Everline provide the following tips for SMEs to protect themselves:
● Ensuring they are properly covered with flooding insurance. If your business already has insurance, check your terms and conditions and make sure everything is up to date. 37% of companies in an FSB poll who were impacted by floods last year expected their insurance to be harder to renew — so do your research and don’t forget how important it is to have insurance. Also, keep the paperwork to hand or store it electronically on the cloud.
● If you’re worried your business premises may flood, back up all data on the cloud so that nothing can be lost.
● You might also want to assess and discuss the issues with your suppliers in order to reduce disruption as much as possible.
● If you are planning to take out a loan or other finance options, it is important to consider the flooding risk when agreeing to repayment schemes.

A negative attitude?
Many might criticise the negative feelings towards the upcoming winter and suggest businesses are being over-cautious. However, what is very true is that we have no real way of telling whether the UK will be hit like it was last year, and being prepared is very prudent, practical and sensible. Many companies failed to recognise the risk last year and suffered devastating consequences as a result.

What is even more apparent is that flooding defences have not been made a main priority by the Government since last year. The current Government cut their annual flood defence spend after they were elected. What must be said is that in Somerset, a coastal flood management scheme costing £20 million was actually completed - a 250-hectare salt marsh was added that was designed to naturally absorb high tides. The rest of the country though hasn’t seen any noticeable major change or addition to help at-risk flood areas. This could mean that if heavy rainfall was to occur again, it might make a similar impact to last year.

If you’re an at-risk business because you are in a flood zone or because you are already financially vulnerable, now would be the best time to prepare and safeguard your company.