We have published a practice note for solicitors dealing with property matters that could be affected by flood risk.
Records indicate that 2012 saw some of the wettest weather in a century. The Association of British Insurers (ABI) says that 'widespread flooding affected more than 8,000 properties', causing approximately £400m of damage.
The insurance market for flood risk has been broadly protected by the Statement of Principles (the Statement) agreed between the ABI and the government. This is the means by which many insurers have agreed to cover even the most 'at risk' properties on 'usual terms'.
For various reasons the Statement is perceived to be unsustainable and the ABI confirmed some time ago that it would not extend the Statement beyond its expiry date of 30 June 2013. The ABI and government have been in prolonged discussions about a more sustainable replacement scheme.
On 16 May 2013 the ABI wrote to Owen Paterson MP, secretary of state for environment, food and rural affairs, to confirm that its members 'will continue to voluntarily meet their commitments to offering flood insurance for an extra month after the current industry flood insurance agreement expires on 30 June, while discussions with the government on the future of flood insurance continue'.
The indications are that negotiations are advanced in relation to the ABI's proposed Flood Re scheme. Even if negotiations were to be concluded shortly, these may not make any provision for commercial property.
The additional month will expire on 31 July 2013. An announcement is awaited.