Chubb, the world's largest publicly traded property and casualty insurance company, has unveiled findings from a new survey that points to a significant underestimation of flood risks among mid-market companies in the U.S., particularly those valued between $10 million and $1 billion. The survey reveals that 85% of companies mistakenly assume their property insurance covers various types of flooding, signaling a pronounced lack of awareness. Moreover, a majority of brokers (56%) note that the organizations they support don't purchase flood insurance, assuming it's already included in their commercial property policy. This misconception extends across regions, with the West exhibiting the largest underinsurance gap (37%), followed by the South (31%), East (28%), and Midwest (23%).
The findings underscore a widespread lack of understanding regarding flood risk prevention and mitigation. Brokers reveal that only a small minority of businesses (69%) recognize flooding as the most common and costly natural disaster. The survey emphasizes the need for education on flood risks and insurance protection, as floods in the U.S. alone have cost over $850 billion since 2000.
Chubb stresses the importance of clarifying coverage details within the insurance industry and urges businesses to take proactive steps. This includes assessing risk factors, seeking flood insurance quotes to understand coverage under commercial property insurers, building resilience using an insurance carrier's tools and technology, adapting to changing realities through regular partnerships with insurers and brokers, and utilizing loss prevention services. This could involve leveraging Internet of Things (IoT) devices to predict and prevent property damage, such as leaks and changes in temperature, humidity, or water pressure that might compromise critical infrastructure and valuable assets. The report aims to prompt a collective effort to enhance awareness and preparedness for the growing threat of floods.
