European equipment insurer Acquis Insurance Management has said a quarter of its claims for UK SMEs in Q1 2016 related to flooding in the UK last year.
Over the past 2 months, one in every four claims submitted to Acquis was caused by flood. Claim volumes increased by 113% over last year, as the effects of extensive flooding in the Northwest of the UK were felt by the insurer.
Financed equipment that was lost or damaged completely due to flooding ranged from IT and office equipment to automotive / garage machinery, forklift trucks, health and beauty equipment, epos systems and vending machines.
Acquis said it settled the majority of all flood claims by providing replacement equipment on a new for old, "like for like" basis, and supplied by the original equipment supplier. The remaining claims were settled by paying off the outstanding lease rentals as the lessee was not in a position to utilise a replacement asset due to extensive flood damage to their premises.
Acquis director Andrew Hobby, stated "The impact of flooding on any business can be devastating, and it is vital for SMEs to have comprehensive insurance covering flood risk that is becoming an increasingly common event.
"We are seeing reports of businesses affected by flooding being unable to source insurance cover, or facing huge increases in compulsory excess levels. This has a direct risk implication for funders whose financed assets will no longer be adequately covered. Funders need to mitigate this risk, and Acquis’s products are designed to provide comprehensive cover to funders who cannot rely on their customers’ insurance to protect their assets".
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Acquis underwrite their financed equipment protection products on a portfolio approach, based entirely on asset type and deal size. Customer location, building type, flood vulnerability and previous claims history are not taken into account in accepting new business risk or determining premiums. All policies have zero excess and no minimum claim amount.
Jeremy Miles, Acquis’s head of operations, highlighted one flood claim where Acquis had protected the funder and customer from loss. "The customer had just started trading as a motor repair garage and financed an MOT testing kit with a value of £22,000.
"The customer’s premises were 5 metres from the River Aire in Leeds and the area was hit by torrential rainfall from Storm Eva, with the river reaching its highest ever recorded level . The premises were severely flooded, and the financed equipment, submerged under 5 feet of water, silt and sewage, was completely written off. At this point the lease was less than a week old.
The customer had no commercial contents insurance, but the funder had insured the asset with Acquis’s Financed Equipment Protection Programme. We paid off the outstanding finance obligation which was a great relief to both the customer and the funder."