Government confirms SMEs will be excluded from Flood Re

In its response to the consultation on insurance in areas of flood risk the government has confirmed that SMEs will not receive access to cover under Flood Re.

The consultation received about 149 responses and closed on 8 August.

Some respondents to the consultation expressed concern over some SMEs’ ability to access affordable property insurance owing to the risk of flooding.

Others felt that flood cover is widely available for SMEs, and that the number of SMEs at risk of flooding is relatively small and businesses are generally better placed than householders to take action to reduce flood risk.

In its response The Department for Environment, Food and Rural Affairs said: “We recognise the difficult challenges that some small businesses could face in areas of high flood risk. However, we remain of the view that overall there is insufficient evidence to justify Government intervention in the provision of insurance cover for small businesses.

“On balance, the Government does not intend to include small businesses within the scope of Flood Re or the Flood Insurance Obligation.”

Charities would also be excluded if they hold business insurance policies.

The response revealed that 67% of respondents supported the government’s proposed approach.

The response stressed that flood management remains a top priority and given the support for the government’s approach they “continue to intend to legislate on flood insurance through the Water Bill.”