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  • Governex with Harry Vigus

Physical Risk: Flooding

Updated: Dec 14, 2020

In recent years flooding events have become more severe and frequent in the UK. Businesses need to understand how the UK climate is changing, and how this impacts their exposure to flood risk. By preparing for these risks, businesses can build resilience and reduce the cost impact of future flooding events.

An increasingly regular occurrence in the UK

There is nothing new about floods impacting the UK. The British Isles are well known for being wet and rainy. However, in recent years there has been an upturn in the frequency at which flood events have made the news. Storm Callum gripped Wales in 2018, 2019 and saw 5,600 flood warning across England, while2020 featured the wettest February ever as several storms including storm Ciara and Dennis struck the UK. Yet to understand whether the UK is becoming increasingly susceptible to flooding events, it’s important to study weather patterns and how they compare with those from the past.

Figure 1: Heavy rain is all too familar for UK residents. Source: Pixabay

The 2018 State of the UK Climate report explains that the UK’s climate is becoming wetter due to increased rainfall. The total rainfall from extremely wet days has increased by 17% when comparing 2008-17 to 1961-90. This goes a long way to explaining the regularity in which flooding events make the news. This is without factoring in rising sea levels which itself leaves coastal communities at a higher risk of flooding events to.

Floods of the future

Comparisons between current weather patterns and those from the past enlighten us to how things have changed so far, yet it’s scientific research which looks to the future. Research cited by the IPCC report warns that almost 6 million people could be affected by flooding across Europe by 2080 and the UK is likely to be one of the worst affected locations.

With the current levels of global emissions, we can confidently predict that rainfall will continue to increase in the UK. However, predictions of future weather patterns feature one key unknown variable. How successfully will society mitigate CO2 emissions? Should greenhouse gas emissions continue to rise at current rates, flooding events will be far more likely than if we make the transition to a low carbon economy quickly.

“In a future where our greenhouse gases emissions continue to increase steeply, the most optimistic projections for river flooding see a worsening in the north, and especially, in north-western Europe,” Dr. Selma Guerreiro, Newcastle University

With increased flood risk seemingly locked in already, various areas across the UK must be aware of the threat. Coastal regions are particularly at risk, as are riverside and floodplain locations. Yet Property Investor Today warn that the threat of surface water flooding means that it isn’t just the obvious regions which are at risk. Estimates suggest that 3 million properties are at risk of surface water flooding. This figure is greater than the 2.7 million at risk from sea and river flooding. An increased demand for new developments, changing land use and increased deforestation mean surface water flooding risk will increase in the future as ground infiltration rates decrease.

Figure 2: Urban areas can be susceptible to flooding. Source Pixabay

The effects on business

Floods affect businesses in broadly two categories.

Firstly, property can be damaged and destroyed. Floods can threaten the structural integrity of buildings as well as destroying their contents. The UK Governments Green Book states that the typical damage per property, per flood event varies from around £7,000 to £10,000 for a flood of less than 0.1 metres in depth, to between £37,000 and £42,000 for a flood in excess of 1.2 metres in depth.

The second broad category of impacts is the disruption of operations which accompanies flooding events. Entire local economies can come to a halt when floods strike, as businesses are unable to offer the products and services they usually provide. Damage to property is usually followed by disruption to business operations, compounding the negative consequences which businesses face.

Figure 3: Flooding can cause major disruption. Source: Pixabay

Most businesses in flood risk areas tend to take out insurance to cover such an event, yet with high risk comes high insurance premiums. Reported insurance losses for the floods which hit the UK in February 2020 were estimated to be £297 million. With increased flooding events in recent years and the promise that changing weather patterns will bring more, insurance may become unavailable and premiums more expensive, perhaps prohibitively so to all but the most wealthy.


The most appropriate way for business to react to the increased risk of flooding is to make their businesses and properties more resilient to flooding. Understanding the risk makes it manageable, allowing businesses to take action to minimise their vulnerability. This applies to businesses which haven’t been affected by flood events but could be in the future. Keeping an eye on long term risks is a wise move and allows businesses to prepare for future challenges.

The simplest way to minimise the risk of operating in a flood risk area is to move operations to a lower risk area. Clearly, this is not always realistic. The next best preventative measure is to create a business flood plan. Creating a plan ensures that a business can be prepared to take action and can deploy temporary resistance measures to best protect property and contents from damage. This will help to minimise financial loss and increase business continuity. Minimising the impacts of a flooding event in this way pays dividend as insurance providers will be able to offer lower premiums to businesses which can show that they are adequately prepared.

Whilst preparation can go a long way to helping individual businesses to minimise the costs of operating in a flood risk area, there is also plenty of ways to mitigate entire areas against flooding. For instance, infrastructure projects can improve drainage capabilities, although these projects are often expensive and rely on public funding. In this case government has to weigh up the economic costs and benefits to the project which may not always lead to the size of project which a given area may require to be completely protected.

Figure 4: large scale drainage infrastructure isn’t always economically viable in smaller areas. Source Kenalston, Pixabay

Alternatively, there are various ways which communities can look to minimise the effects of flood events using natural methods. Communities can work to evolve alongside their natural resources by encouraging meanders in rivers, supporting catchment woodland areas and improving water infiltration by creating a utility natural environment. These methodologies are a vital piece of the puzzle when improving flood risk areas.


The severity and frequency of flood events have increased over the last half a century in the UK and this trend is likely to continue due to rapidly changing weather patterns caused by excessive carbon emissions. Flooding poses a real threat to the economical continuation of some businesses. If they are operating in flood risk areas, businesses should create flood plans to evaluate the risk which they face and make informed decisions on how to respond to these. A thorough understanding of the damages which flooding would likely cause, as well as using a variety of adaptive and protective measures to protect property, means businesses can adequately prepare themselves for the future.


Governex provide a range of risk advisory and mitigation services. If flooding or other environmental risk are a concern for your business please feel free to get in touch for a discussion.


Co-authored by Governex and Harry Vigus

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