Flood prevention could have Professional Indemnity Insurance implications

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The Statement of Principles (SoP) - an agreement between central government and the insurance industry whereby insurers commit to provide cover in return for guaranteed government investment in flood protection measures – is to come to an end in 2013 after 13 years. Not surprisingly, the decision has started a wide-ranging debate.



One approach being suggested is to encourage home and business owners to undertake their own flood prevention measures in return for possibly reduced insurance premiums. But that could raise problems according to Robert Welfare, a partner with law firm Kennedys, if action taken by a property owner simply diverts flood water towards other properties. Such an outcome could give rise to civil claims for compensation.



Moreover, the abandonment of the SoP is likely to increase the importance of conveyancers and surveyors giving full consideration to, and advising on, flood risks. And that could have significant implications for their professional indemnity insurance.