Flood insurance to remain for startups at risk.

 The ABI (Association of British Insurers) and the Government have reached agreement that ensures flood insurance remains widely available now, and in the long term, for all small businesses and households that are most at risk of flooding.

Following last summers floods the insurance industry have had to make significant payouts resulting in fears that coverage may be pulled for those most at risk.

The summer floods in Britain cost £3 billion, making 2007 the worst year for weather-related damage, insurers say. It resulted in the ABI to call for a limit on the number of homes and small businesses built on land prone to flooding.

The government agreed to make flood insurance for homes and small businesses available under household and commercial insurance, where the flood risk is no worse than a 1 in 75 [1.3%] annual risk.

Government pledges to invest in flood defences will make offering insurance to those small businesses at risk more palatable for insurance firms. In addition to investment in defence systems the government will also undertake to promote access to home insurance for low income households.

Floods Minister, Phil Woolas, said the agreement was a result of successful collaboration and he is, “delighted that the industry has agreed to work with us to raise awareness and encourage small businesses and homeowners to take steps to protect themselves where appropriate.”

The ABI said the agreement was good news for everyone at risk of flooding. Stephen Haddrill, the ABI’s Director General said, the ABI, “are pleased that the Government recognises that a long-term investment strategy, adequately funded, is the best way to manage the growing flood threat.

The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK

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