With the recent floods devastating parts of the UK, RBS are warning that it’s vital that businesses are equipped to weather the storm. This seven-point briefing will take you through what you can do to minimise your exposure to flooding and offer tips on how to cope if you’re affected.
You don’t have to be near a river or the sea to be at risk of flooding: surface water (pluvial) flooding from groundwater is a threat too. The first thing every company should do is find out their risk of flooding.
1. Flood risk
About 185,000 commercial properties are at risk of flooding in England and Wales. Flood damage can be costly to your business, with the average losses from a flood being around £28,000.
To find out if you are at risk, sign up to the Environment Agency’s free Flood Warning Direct service. Your business will then be enable to receive flood warnings by telephone, mobile, email, text or fax. You can also enter your postcode in the Flood Map box on the website to check your risk.
There are also private companies, such as Sitecheck Flood, who can assess the potential flood risk to a commercial site.
2. Preparation
You could save between 20 and 90 per cent on the cost of lost stock and equipment by taking steps in advance and drawing up a Flood Plan. This should cover:
– Creating a flood kit: include important documents such as insurance certificates, essential numbers (insurance company etc) and files, a torch and a wind-up or battery radio tuned to local radio for emergency updates.
– Reducing the risk of potential damage: consider installing British Safety Standard-accredited flood barriers and buying sandbags and planks for boarding up doors and windows. Where possible, raise electric sockets and wiring on walls. Place machinery on plinths and consider an emergency power generator
– Protecting company files: back up electronic data regularly and store customer/supplier records safely – offsite, if possible. Ensure there is remote access to emails and important data such as financials.
You should also consider:
– An evacuation plan: companies such as drawingofficeservices.co.uk can create a floor plan of the building if your premises are large. Be sure to highlight service shut-off points and emergency exits.
– A list of important contacts, such as building services and suppliers, and evacuation contacts for employees
– A checklist of evacuation procedures that have been memorised or can be quickly accessed by key staff (via their smartphone, for example).
Both the Environment Agency and Know Your Flood Risk [page 16] offer Flood Plan templates. You should review and update your plan annually.
3. Supply chain disruption
A recent Business Continuity Institute (BCI) report revealed that adverse weather is the second leading cause of supply chain disruption, experienced by 48 per cent of firms in 2012. Map out key suppliers and put a plan B in place.
The BCI flags up five key principles:
– Assume the worst case scenario: what will you actually do if you or your suppliers are hit by a flood?
– If you have a procurement team, they should check that suppliers’ continuity plans have been evaluated and tested. You may not be your supplier’s main priority – make sure you know where you stand.
– Focus on your key suppliers when you draw up your own plan. These may be those with the largest spend but niche suppliers may be more difficult to replace.
– Consider the whole supply chain: suppliers, subcontractors, logistics, warehousing etc. Do they have a code of practice or published standard such as the BS259999 (the British Standard Institute’s standard for Business Continuity Management)?
– Maintain good communication with all your suppliers, and work with them to develop continuity capability.
4. Continuity planning
A continuity plan sets out how your business will continue to function in the event of a crisis and how you intend to return to ‘business as usual’ as quickly as possible. It should clearly state actions and responsibilities and can be broken down into three stages: preparation, immediate response and longer-term.
Preparation: identify the personnel and equipment (IT, transport etc) vital to operations establish how long it would take for normal operations to be restored identify available alternative resources list essential suppliers and third parties.
Immediate response: have a clear list of roles and responsibilities within your business for emergencies create an evacuation plan, including muster points and support for those with special needs determine how to maintain internal and external communications.
Longer-term: organise alternative business accommodation and facilities plan remote access to IT systems, financials and business records establish processes for returning to normal operations co-ordinate stock replacement and vehicle servicing, if needed.
5. Communication: managing client expectations
Don’t forget your customers amid the chaos. In business, no news is bad news and your clients will want to be updated on how any setback affects them. Make sure each account handler contacts everybody on their client list as soon as possible to brief them on your situation.
Explain that you are activating an established contingency plan and that all essential records and financials are safe and accessible. If you anticipate delays to deliveries, give customers a realistic timeframe to avoid unnecessary disappointment; most people will be sympathetic when they know you are doing your utmost to improve a bad situation caused by circumstances out of your control.
If you’re a sole trader, it may be worth creating a pro forma response to an emergency (an email or website holding page, for example) that can buy you time until you can formulate a more in-depth response.
6. Recovery checklist
Never go back into your premises until you are certain they are safe. Potential dangers include contaminated sewage, damaged electrics and structural damage. Council staff will be on call to assess damage and offer advice. Also: Call pest control as rodents may have been disturbed by the water. Switch off all electrical equipment and call electrical contractors/your mains supplier to assess/repair. Turn off the gas supply and any gas appliances and call in Corgi (all contact details at the end of the article) registered contractors to assess/repair appliances. If you smell gas, call the National Grid. Drinking water also may have been contaminated; call United Utilities to check. Equipment such as lifts, hoists, chemicals may need specialist advice.
7. Insurance
Insurers have been using increasingly sophisticated tools to calculate policies in flood risk areas — with a move to risk-based pricing. The Statement of Principles agreement between insurers and the Government offered flood cover as standard on low-risk properties built before 1 January 2009 but it expires in June 2013. There is no obligation for insurers to offer cover against flood risk for property built after 1 January 2009.
Make sure you are insured for the full rebuilding cost of your premises. Replacement as new is expensive but may be preferable, while indemnity deducts the cost of wear and tear. Choose the right ‘business interruption’ policy: are you covered for staff salaries during your contingency plan? Can you claim for transport to alternative premises for the duration? You will also need to take repair and/or drying time into account.
If you work from home, you will need to check that your contents insurance covers all you need to return to work as quickly as possible (for example, PC, telecommunications, light and heating). Keep insurance documents in a safe, easy-to-find location so you can make a claim quickly. Create an inventory of major business items and take photos and/or videos of any damage immediately after a flood to support any future claim.
Investing time in planning how to minimise the effects of flooding now can save you money in the future – and give you and your employees peace of mind if 2013 proves to be as wet as 2012. And, please remember that if you are affected by floods, your Relationship Manager at the Bank is on hand to help your business get back on its feet. Please call them for help or assistance. In addition, you will find useful information on protecting your business at RBS Business Insurance and with RBS Mentor’s adverse weather guidance.
Useful numbers
Environment Agency Floodline 0845 988 1188 / Typetalk 18001 0845 602 6340 (24 hours)*
National Grid (gas) 0800 111 999 / minicom 0800 371 787 (24 hours, free phone)
United Utilities (water) 0845 746 2200 / Typetalk 18001 0845 746 2200 (24 hours)*
ciria.org.uk (repair of buildings after floods) 020 7549 3300 (9am-5pm, weekdays)*
*Calls are typically charged at between 1p and 10.5p per minute depending on the time of day for landline customers.
Mobile providers’ charges may vary.