PROPERTY & FINANCE
Don’t Get Wet Wet Wet
What do care home managers need to know about insurance cover in the case of flooding? Simon Bentley, divisional director of Howden’s Care division tells us just that.
Since the launch of Flood Re in April this year, a new initiative to ensure that people in flood risk areas can get affordable insurance, Howdens have had a number of calls from care home customers querying how this affects them.
If you manage a care home in flood- prone areas and have heard the news about Flood Re, be aware that it does not apply to commercial care home premises. So while homeowners in high-risk areas can breathe a sigh of relief, the same cannot be said for the commercial sector- it is business as usual, and care managers should budget to allow a significant premium for flood cover.
For an accurate picture of your flood risk it is advisable to speak with a specialist care insurance broker who will be able to advise on the appropriate cover and help ensure the insurance premium payable reflects the real risk and your claims history.
Insurers will determine, to an incredibly detailed level of accuracy, the risk of your building being flooded by surface water. Even businesses that have already been affected by flooding can usually find commercial property flood insurance, so don’t be tempted to overlook this.
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Cover can include the costs of cleaning up after the flood and business interruption insurance to cover the costs to your business of getting up and running again. Ensure that you have an emergency evacuation and re-housing plan and that flooding is included as a trigger for your insurance policy to cover the significant costs.
Although flooding is the headline grabber, our claims records show that the even bigger threat is escape of water, caused by hazards such as a dripping tap, cistern, a loose washing machine or dishwasher hose. An overflow in an upstairs resident’s en-suite can easily end up causing significant damage to several rooms below before you even notice.
In fact, claims from escape of water, as we refer to them, continue to be one of the biggest causes of commercial insurance claims. Claims will inevitably affect premiums and in the worst case scenarios, and after repeated claims, insurers may decline to include escape of water cover in your policy at all. You should take steps to minimise your risk.
Do you know if you have accidental cover included in your policy? This is important when it comes to escape of water claims. Most commonly it is a burst pipe that causes water
damage – and this will be covered by your policy if the pipe is a permanent fixture. However, damage to individual rooms following leaks from appliances or overflows from sinks would only be covered if the building has accidental damage cover.
Your ongoing maintenance programme should include regular checks on the condition of all plumbing and hoses. Think too about fitting individual stopcocks for appliances, baths and sinks or for different areas of the building so you can isolate them in case of a burst pipe or major leak. Make sure you engage staff in the process and educate them to the potential damage that a small drip can cause so that they notice and report anything untoward.
Any incident involving water has the potential to cause major disruption to a care home business. We cannot offer you good news about flood risk premiums if you are in a high risk area, but we can remind you that premiums are affected by any claim you have to make. So while you cannot hold back a flood, you are still in the driving seat when it comes to managing and minimising a more common water risk.
www.howdengroup.com/ careandmedical
www.tomorrowscare.co.uk
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