Some £15m of emergency payments have been made by insurers to UK businesses to aid attempts to recover from the worst flooding that some cities in the North of England have ever seen, according to new statistics by the Association of British Insurers (ABI).
Total claims for flood damage following recent storms in the North of England are likely to rise to some £1.3bn, the report also revealed.
James Dalton, a director of insurance policy at the ABI, said: “The December storms have brought devastating flooding to significant parts of the UK. Insurers and their representatives have been there to provide practical help and support as quickly as possible to businesses coping with the trauma.”
However, the Federation of Small Businesses (FSB) warned that some micro firms will struggle to recover from the floods, having been unable to obtain insurance to cover against the disaster. Research published by the FSB in July 2015 revealed that nine per cent of the smallest firms in flood risk areas had struggled to obtain insurance – while six per cent had been refused cover altogether.
“This is a longstanding issue. As ministers and the insurance industry plan to bring in a new ‘Flood Re’ scheme to back those refused cover, FSB has expressed its deep concern to ministers and the insurance industry that the smallest businesses will now be excluded,” said John Allan, the FSB’s national chairman.
“Much like households, micro businesses are least able to negotiate competitive insurance. When the new scheme is introduced in April 2016, FSB now calls for the smallest businesses to be included,” he added.
Lenders have also responded to the the challenges flooding has caused small businesses by offering favourable credit terms to affected businesses.
Barclays announced capital repayment holidays for flooded customers at the beginning of December – while Hitachi Capital created a £4m “Rural Emergency Fund” to offer interest-free loans to support small rural enterprises in replacing damaged equipment.
Royal Bank of Scotland (RBS) also unveiled an “adverse weather scheme” for flood-hit firms, which included offering business customers free overdrafts.
Les Matheson, CEO of personal and business banking at NatWest and RBS, said: “We want to help the people and business owners affected by the recent flooding by making banking the least of their worries.”
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