Navigating Climate Change and Flooding: A Guide for Insurance Brokers

Picture this: a working farm nestled amidst rolling hills, its livestock contentedly grazing on lush pastures, and a bustling agricultural operation. However, this idyllic scene is increasingly under threat. Climate change has ushered in an era of extreme weather in the UK, and with it, a surge in flooding events that are impacting the farming industry like never before.

As a farm insurance broker, it's vital to understand the evolving landscape of farm insurance, especially in the face of these climate-induced challenges. Land Based Underwriters are here to shed light on the legal, financial, and insurance-related aspects of this issue, and how we can help brokers and farmers navigate these troubled waters.

The Growing Trouble of Flooding

February in the UK has morphed into a month known for extreme weather records being shattered year after year. In February 2022, three devastating storms hit the UK, with England experiencing peak winds of 122mph—a record. These tumultuous weather events are becoming alarmingly frequent, posing a grave threat to the farming industry.

Consider the havoc brought by storm Henk last month, along with storm Babet last October, which submerged fields and decimated crops, causing a disastrous harvest. The farming community is now on the frontline of the battle against extreme weather and climate breakdown in the UK, with growing calls for the government to help farmers and the insurance industry alike.

 Legal and Financial Risks to Farmers

So, what are the legal and financial risks that farmers face when their land becomes a victim of flooding?

  1. Physical Loss and Damage: Farmers risk substantial losses, including damage to crops, livestock, buildings, and agricultural equipment.
  2. Government Subsidies: Floods can jeopardise government subsidies that are contingent on farmers adhering to specific agreement conditions.
  3. Liability for Harm: Excessive flooding causing harm to others' land could result in liability for nuisance or negligence.
  4. Environmental Agency Actions: In theory, the Environmental Agency could take enforcement actions if floodwaters pose an environmental risk.

Climate Change and Environmental Damage Insurance

Climate change necessitates changes to insurance. The insurance industry's foundation rests on providing coverage for the losses of a few through contributions from many. With the increased frequency of natural disasters like flooding, there is a growing concern that insurance expenses could surpass market capacity, leading to a wider 'protection gap.' Land Based Underwriters acknowledges this challenge and is committed to advancing insurance products to work in tandem with the government and other industries.

These partnerships aim to keep premiums down and protect farmers, their land, livestock, and property in the face of extreme weather in the UK.

Key Takeaways:

  • Prevention is preferable, so engage proactively with the Environmental Agency.
  • Explore opportunities for flood management practices with the Environmental Land Management scheme.
  • Seek assistance from the Rural Payments Agency if floods hinder your compliance with agreement conditions.
  • Maintain detailed records of flood events and communications with relevant parties.

Land Based Underwrites: Your Partner Against Flooding

In a world where climate change is reshaping our environment and posing new challenges to the farming industry, the role of farm insurance brokers has never been more crucial. Land Based Underwriters is your partner in navigating these complex issues, and we're here to help brokers and farmers alike with our expert knowledge of environmental impairment insurance.

As we look to the future, the question remains: How can we adapt and protect our farms in the face of increasingly unpredictable weather patterns and climate change?

If you have concerns about potential environmental damage insurance claims, don't hesitate to reach out to contact us. Our friendly team members can discuss the best coverage options available to you.