INSURANCE premiums could rise by as much as 5% as a result of this week's flooding, a North East insurance broker has warned.
The warning comes as businesses are advised to ensure they have adequate business continuity plans in place in case they are disrupted by flooding in the future.
Henderson Insurance Brokers (HIBL) has called on the Government to increase infrastructure spending on flood defences and transport.
Jonathan Willett, HIBL Teesside director, said the latest deluge was bound to increase insurance premiums for businesses.
He added: “Cash-strapped businesses are already feeling the pinch from the recession, inflation, the fall-out from the banking crisis and a lack of access to funding.
“The financial knock-on effects of this year’s repeated floods will put further pressure on businesses in the region.”
The Onyx Group, a Stockton-based company, which provides business continuity and disaster recovery solutions, said it is vital that companies have robust plans in place in case they are disrupted by flooding.
Plans could include an accessible workplace recovery centre or cloud storage solutions which would protect against data loss and allow data to be accessed offsite.
Neil Stephenson, chief executive of the Onyx Group, said: “Business continuity is about making sure that, no matter what happens, a business can carry on as usual.
“As the current flooding is demonstrating, organisations in less-resilient sites need to consider staff relocation, how they would cope if their current premises were temporarily unavailable and, for example, the possibility of a server being flooded, resulting in a loss of data.”
Research commissioned by Axa Insurance found that 80% of small firms affected by incidents such as flooding go out of business in 18 months.
In June this year, Newcastle-based Parkers Executive Chauffeurs found their Skinnerburn Road offices under a foot of water and used Regus walk-in offices while their premises were being repaired.
Managing director Brian Rudd said: “Dealing with insurance companies, loss adjusters and landlords, while soldiering on through power cuts, was considerably more time-consuming than you’d imagine.
“Although we spent three happy months with Regus in Quayside’s Rotterdam House, it’s nice to be home.”