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Written question asked by Chuka Umunna (Labour) on Wednesday, 12 February 2014, in the House of Commons. It was due for an answer on Monday, 24 February 2014. It was answered by Dan Rogerson (Liberal Democrat) on Monday, 24 February 2014 on behalf of the Department for Environment, Food and Rural Affairs.

Floods: Insurance

Question

To ask the Secretary of State for Environment, Food and Rural Affairs (1) why small businesses are not included in the Flood Re scheme;

Answer

The Flood Re scheme has been specifically designed to provide affordable flood insurance to domestic policyholders who will also fund it. It would be inappropriate to ask domestic policyholders to subsidise insurance for small businesses.

The scheme is not suitable for commercial properties. In general, business insurance policies are often bespoke and already priced to risk, as opposed to the household insurance market where a cross-subsidy has historically been in place. A survey of over 9,000 businesses in England estimated that less than 1% of them had experienced difficulty getting property insurance in the last year due to the risk of flooding and that no businesses had been refused insurance cover due to the risk of flooding. This view was supported in the consultation on Flood Re and in discussions with other Departments.

We have held regular discussion with the ABI, representatives of small businesses and other Government Departments and will continue to work with them as we monitor the insurance market for small businesses and keep the issue under review.

Secondary information

Type
Written question
Reference
188296; 576 c83W
Session
2013-14
Transferred
Yes
Subjects
Insurance Floods Small businesses
Link
View this Written question on www.publications.parliament.uk