Spring flooding: Think you're covered? Think again

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Spring flooding: Think you're covered? Think again

Ottawa Business Journal - Ontario, Canada*

By Kovessy, Ottawa Business Journal Staff

Mon, Apr 7, 2008

http://www.ottawabusinessjournal.com/316870351135360.php

As rising temperatures accelerate the melting of Ottawa's still-

lofty snowbanks, many commercial property owners will be paying out

of their own pocket for any damage caused by water seeping into

their buildings, say several of the city's insurance experts.

Although insurance policies vary, and holders are always advised to

consult their broker to find out their exact coverage, flood

protection generally only refers to the overflow of a body of water,

such as a tidal wave or tsunami, explains Petrie, a partner

at , Petrie, Carr and Insurance Brokers, Ltd.

" It has to come from a lake or a river or a reservoir ... Basically,

groundwater, which is what probably you are going to see a fair

amount of this year, is not covered, " says Mr. Petrie, giving the

examples of water exerting pressure on a building's foundation or

seeping in through a window as exclusions.

Tanner, a partner at Tanner Insurance, also says groundwater

coming in through an aperture in the building is not covered.

However, Mr. Tanner says most commercial properties are covered in

the case of sewer backups, which he says is a risk in Ottawa because

the city's combined stormwater and sewer system can back up when it

reaches capacity.

" I would suspect 90 to 95 per cent of the commercial properties that

are out there now have sewer backup coverage. That would be the

major exposure, sewer backup, because of the city's archaic sewer

system, " he says.

Property owners should also consider their coverage for damage that

only appears once the water recedes.

" Mould is generally excluded from most current policies unless they

have a special rider, " says Nearing, a partner at Borden

Ladner Gervais LLP. " If the moisture and the water penetration is

not properly cleaned up, the potential for mould happens, " he adds.

It is also important to check that all the conditions set out in an

insurance policy are being met, such as keeping eavestroughs clear

of ice and debris, says Najma Rashid, a lawyer with

BrazeauSeller.LLP and its sister firm, Yegendorf and

Associates.

Ms. Rashid also advises property owners to limit their own exposure

by keeping their property clear of ice, which can accumulate in the

spring as water runoff freezes overnight.

" We've had warm temperatures for the last two weeks, but in parking

lots and on sidewalks, there is an enormous amount of ice, even now.

As a lawyer, we are flooded with calls from people who slip and fall

and hurt themselves, " she says.

If there is one upside to the spring flooding risks in Ottawa, it is

that businesses are being forced to think about their plans for all

forms of crises, says Garth Whyte, the executive vice-president of

the Canadian Federation of Independent Business.

He says past research found 43 per cent of businesses that

experience a major crisis such as a fire or flood never reopen,

underscoring the need for proper planning.

Mr. Whyte suggests businesses develop an emergency plan that

identifies threats and risk mitigation strategies. He also advises

drafting a business continuity plan, which includes a backup contact

list of the company's suppliers, customers and financial

institutions.

" You should contact your suppliers to let them know (you're) going

to be out of business for a week or two, " he says, adding it is also

important for businesses to take care of their customers by, for

example, directing them to another supplier or company who can meet

their short-term needs while the damaged business recovers or

rebuilds.

" A lot of it is planning, " says Mr. Whyte, adding, " The worst time

to plan for a flood is when there is a flood. "

Tips for minimizing risk of flooding:

Remove remaining snow away from buildings

Check property for obstructions that could prevent melting snow from

draining away from your building properly and clear a path for water

Check catch basins on the street to ensure they are not obstructed

Move valuable items to higher ground

Talk to your insurance broker to clarify your coverage

Prepare a business continuity plan