What To Do To Prepare for a Flood for Small Business Owners

What To Do To Prepare For a Flood Disclaimer: Flood preparedness information in this article is observational in nature. It is not intended to be a substitute for general safety recommendations from your local first responders. Information is not intended to serve as legal advice, e.g., for adhering to workplace compliance requirements around safety. Please consult appropriate authorities and use the information in this article at your own risk. 

Flooding can be devastating for unprepared small business owners. Natural disasters such as hurricanes or prolonged periods of rain that lead to floods can cause small business owners to close offices. They can damage physical property. Like computers and the important data they contain. A small business owner might not be located in an area prone to flooding. But events like a pipe bursting could cause similar damage. However, insurance agents can help clients and prospects learn what to do to prepare for a flood. Then hopefully, mitigate any damage.

There are a few areas to consider with floods. The financial risk of a flood. Dealing with the aftermath of a flood. Preventative steps to get ahead of a flood.  Adding or adapting drainage systems and leak sensors, small businesses can potentially improve their readiness to deal with the threat of floods. Insurance agents might only have limited input into what clients do to prepare for floods. By at least reviewing this topic and making a few suggestions, you can start to build stronger relationships with clients.

In this article, we’ll explore in more depth how insurance agents can help clients and prospects regarding what to do to prepare for a flood.

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Review Risk Levels

One place where insurance agents might want to start when talking to clients about flood preparedness is to review current risk levels. That way, small businesses can get a better sense of the insurance they need. Go over the specifics around what’s covered and the financial limits of a policy. That can include looking at areas like:

Property Risk

If a flood did happen, what might that mean for a particular small business? Some companies might be hit harder financially than others due to the value of damaged property. For example, a jewelry store might have a higher total value of merchandise than, say, a convenience store. Or a manufacturing business might have more expensive equipment than a software startup. A small business that owns its own physical location also might have a lot at stake. These can affect how much insurance a business needs.

Business Continuity Risk

The cost of property damage is only one area that affects how much is at stake. Business continuity risk can also affect the total financial exposure of a flood. A restaurant that gets flooded might have to close for a while. In this case they would miss out on revenue and the cost of fixing any damage from a flood. In contrast, a consulting firm that has limited equipment and stores all of its data in the cloud might be at a lower financial risk if its office floods. Even though that would still probably be difficult and perhaps expensive to deal with, the consulting firm could likely still work remotely until the office can be restored. So, there might be less of a financial hit.

Geographic Risk

Another area that might be worth exploring is the geographic risk of a flood. A client in a dry climate might be at lower risk for flooding than a client in a wet, hurricane-prone climate. Though flooding can still occur due to mechanical issues like water leaking from plumbing. Other geographic factors might also differentiate the risk levels of small businesses. Even within the same city. If one client’s office is located at a lower elevation than another, the lower-elevation office might be more prone to flooding.  

As the National Flood Insurance Program from FEMA notes, “Knowing your building’s elevation compared to the estimated height of floodwater helps determine your flood risk and the cost of your flood insurance.”

Prepare for the Worst

In addition to helping clients weigh insurance decisions, it can also be helpful to help them prepare for the worst. In other words, assume that a flood will happen. You want to make sure that small business owners have a plan in place that they can follow in a moment of crisis. They don’t want to be scrambling to come up with a plan after a flood occurs. 

Being prepared can involve areas like:

• Understanding how to make an insurance claim in the event of a flood
• Having a contingency plan in place, such as to work remotely if an office becomes unusable due to flooding
• Preparing a financial buffer, which might involve setting up access to money in the event a business needs to wait for an insurance claim to process, as well as to potentially cover what insurance might not protect
• Developing a communication plan, such as to inform customers and employees of how the business is handling the flood

Businesses might not be able to prepare for every scenario. At least thinking about these types of issues can potentially make dealing with floods easier. The sooner they can respond to the flood, the sooner they might be able to get back to normal.

Connect Clients to Valuable Resources

So now you’ve had conversations with clients about areas like risk management. Insurance agents also might be able to help small businesses know what to do to prepare for floods by connecting them to valuable resources. Some of the ways that may play out include:

• Recommending experts: Insurance agents themselves might not be experts on flood prevention, but perhaps others in their network have the qualifications to assess flood risk and make flood safety recommendations. For example, maybe you met a local contractor within a business networking group, and they could talk to your client about how installing drainage systems might reduce the risk of flood damage.

• Sharing advice: Similar to recommending experts, insurance agents might want to share advice that they come across that could help other business owners. For example, perhaps you saw an article about leak detection systems that you could pass on to a client who is looking for a way to prepare for floods by monitoring their plumbing more.
   
• Connecting business owners with one another: If a client or prospect is worried about how a flood might affect them, you might be able to help by connecting them to another business owner in your network who can relate, aside from just those who are experts. Perhaps a peer business has gone through making insurance claims due to damaged property from a flood, and they might be willing to talk to your other client about what that experience was like.

The Wrap Up

Knowing what to do to prepare for a flood isn’t always easy. Insurance agents can help their clients and prospects feel more comfortable by sharing these types of resources. Discussing areas like risk and knowing how to respond if a flood does actually happen, can go a long way toward making small business owners feel more comfortable. 

Even if these businesses don’t change their approach very much, they might still appreciate you taking the time to offer your support. Especially if you’re doing so as an added value to them, rather than overtly just trying to sell larger policies. If you can genuinely try to help, you may find that you can start to build deeper relationships with clients. This can then organically lead to bigger policies, recommendations and similar benefits down the road.