The Calgary floods of 2013 still lurk in the minds of many Canadians. The city was devastated by flooding when water spilled over the banks of its two major rivers, causing millions in damages and one death.
Alberta, as a whole, suffered approximately $5 billion total damages and $1.7 billion insurable damages in the 2013 floods, which was Canada’s most costly natural catastrophe until the Fort McMurray wildfire in 2016.
Federal and provincial authorities have made significant ground with regards to flood mitigation and disaster preparation since the Calgary floods of 2013 and later water events like the Ottawa River flooding last year, according to Peter Kennedy, senior vice president, National Real Estate Practice leader, Aon.
“Authorities have been pumping substantial amounts of money into flood disaster programs and mitigation – but there’s still a long way to go in terms of determining Canada’s flood maps and educating people about flood zones and high-risk areas,” Kennedy told Insurance Business.
“Flood mapping will never be a precise science. Things crop up like ice jams in rivers or even infrastructure developments, which can change the dynamics of how rising waters will flow. All insurers and brokers can do is try to raise awareness and understanding about potential flood risk zones, and then help clients to take appropriate mitigation and preparation steps.”
Overland flood coverage is a standard provision in most commercial insurance package policies. Where commercial entities have to be careful is around the definitions of flood (overland flood versus water damage) within their policies, Kennedy explained. Other issues that sometimes crop up are surcharged premium rates and deductibles for business with assets in high risk flood zones. Brokers need to alert clients to high-risk locations and advise them on how best to mitigate the risk, he added.
“If a commercial enterprise has a flood event, there’s a tremendous risk of business interruption loss that can occur as a result,” said Kennedy. “Organizations with assets in high-risk flood zones need to have active flood emergency planning resources and disaster recovery plans in place in order to protect properties from damage in the first place and also enable the business to get back up and running swiftly and efficiently after an unavoidable flood event.
“There’s lots of resources available to assist businesses in high-risk flood zones, and lots of new technology in terms of sensors, products and services. However, not all commercial entities are aware of the options available to them. The insurance industry can help breach this flood education gap.”