Initiative Insurance

I won’t attempt to pretty it up: Natural disasters are difficult to insure against. Property damage, on the scale seen caused by flooding, earthquakes, storms, etc, is hard to prevent – and, in some cases, to become insured against. But then if you have chosen to locate your facility in Tornado Alley, you can’t expect your property insurance policy to go through without a few questions.

When it comes to flooding, insurance takers in certain locations around the globe will also experience issues when asking for quotes, and almost certainly with higher premiums as a result. What can you do if your business is located in what commercial insurance companies deem a high-risk area? You could move somewhere else, but this is not always an option – depending on the nature of your business. You will be the best judge of that.

If we assume that you have to stay put, how can you approach cheap commercial insurance for your property and physical assets? Let me just say, that unless you can afford to install your business in a bomb-proof concrete bunker, you shouldn’t expect to walk away from a full-on Tsunami unscathed. There are precautions you can take against extensive water damage, but they are more for more moderate amounts of water – not 30-foot high tidal waves. Still, if every single insurance quote you get seems focused on the risk of flooding, then you might want to take it seriously.

Take a good look at your location, your building and its elevation from sea-level (or from the nearest large body of water which could be expected to swell in some circumstances). Ask yourself some questions:

How are the immediate surroundings? Is the ground sloping toward the building, or away from it? If it is sloping away, how much must the water rise to enter your facility? What happens to any water entering your building at floor level? How efficient is the drainage? What will be damaged by any water left standing on the floor, if it somehow isn’t drained away? What can you do to minimize your losses due to water damage?

Let’s say it’s been raining hard all week, and the sewers can’t take the pressure. Water rises in the street and at some point, it starts flowing over your doorstep. You have expensive machinery and pallets of your products ready to ship, standing on the floor. When is the water going to be a problem? At half an inch? Two inches? If, by raising valuable assets from the floor, you can appease a sceptical insurance agent, then your should consider it it can’t be done somehow.

How much of your vertical space are you using? If you could use more of it for storage, then you would not only have made life safer for your inventory of various goods, spares, consumables, etc – you would also have freed up some floor space. A foot of water on the floor is less of a problem if everything worth anything is five feet in the air. Perhaps rent some remote storage space on higher ground somewhere?

As you can see, there are options here. Be creative, reinvent your physical space in your head, and you might come up with even more ways to guard your business against too much water – and too high commercial buildings insurance premiums.