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‘At risk of flooding’: 10 steps to building flood risk resilience

By Melanie Mason
Underwriting Manager

The number of flood events in Canada is on the rise. Businesses, public services, and local communities must pro-actively plan flood responses to build long-term climate resilience for the future.

Climate change is having a huge impact on the scale of extreme weather events all around the world – and firms must prioritize climate risks more than ever to manage the business disruption and costs of experiencing the inevitable.

Research revealed that 54% of Canadian businesses saw a substantial rise in their overall costs due to weather events last year, while 44% reported direct losses in revenue.

Over half of small- and medium sized businesses experienced supply chain disruption, and 45% stated that their facilities suffered damage.[1]

The changing climate is increasing the frequency of extreme weather events globally, but are businesses keeping up with the level of preparedness needed?


Flood risks in Canada

Last year was one of the worst years for severe weather-related losses in Canadian history, with flooding - the most frequent natural hazard in Canada – causing destruction in nearly every region.[2]

In fact, Canada experienced $3.1 billion in this type of loss in 2023, including $170 million damage for the Nova Scotia flooding alone.[3] And in 2021, the flooding of Abbotsford and the Sumas Prairie caused an estimated $2 billion in damage to properties, homes, and city infrastructure.

The most common and most costly flood-related claims fall broadly into two categories. The first is clean-up costs, especially as water and silt will penetrate a building and can completely saturate drywall and other finishings. Property owners will also have a more complex claim if the flood water is dirty and/or contaminated. Any flood event can lead to mould if the clean-up operation is not thorough, and enough care taken at the drying out stage. If mould is present, then the removal processes become more challenging and expensive.

Business interruption also makes up a significant proportion of flood claims and could be costly if the insured’s location is not accessible for a period – or there is a shortage of labour available to help in the clean-up process and mitigation.

One retail customer experienced flood impact across multiple stores from a single event and because the area was remote, access to the site was not easy. The store interior needed to be stripped to the studs as a delay to the clean-up operation meant the interior finishings and stock were completely saturated.

While the business impact of flooding is typically seen in property damage, lost production, lost wages, and resources redirected to recovery, the additional indirect impact of evacuation, infrastructure damage, administration costs and reduced GDP will also have significant effects.


How can businesses protect against flood risk?

Working with risk advisors and insurers to prepare for likely flood scenarios will help contingency plans deliver targeted responses to minimize impact.

Climate transition risk assessments and flood-specific incident response plans will help companies assess their vulnerabilities and plan measures to reduce the risks before a flood happens, when a flood warning is issued and even during a flood event.

While the risk of flooding is unavoidable, a flood response plan can help control and minimize the impact, via the approach of both resistance and recovery.

This assessment should cover both the main business operations alongside third parties in the supply chain. The potential business continuity of suppliers and contractors should form part of business interruption scenarios. Firms should also consider the wider industry environment (including ongoing or pre-existing issues such as supply chain delays) and the physical location of the business.


10 steps to building flood risk resilience:


  1. Understand the nature of the flood and areas that could be affected including source, weather events, warning time, potential depth, flood return level, estimated duration and projected costs of damage and business disruption.
  2. Designate responsibility for creating, maintaining and activating a flood response plan
  3. Identify actions and those responsible that when deployed, will have significant impact over the site or operations. This may include powering down of electrical power, shutdown of gas and other utilities and the timeline of this process.
  4. Remove standing or ponding water in key critical areas such as basements, areas containing high value equipment, or ponding in the racking storage areas.
  5. Plan and document practices and procedures for relocating equipment and storage to higher levels.
  6. Ensure staff have been designated specific responsibilities and understand their roles fully. Roles should be documented, and training provided where necessary.
  7. Designate someone to monitor flood information from official sources including the government, local authorities, media and jurisdictional bodies.
  8. Identify (and consider retaining) key contractors and suppliers in case of flood. This may include generator hire, emergency sump pumps, sandbags, mops, buckets, and forklift trucks.
  9. Develop a post-flood clean-up plan including potential contamination, cleaning equipment, drainage requirements, consent for water release into waterways, repairs, power-up protocols, communication with authorities and best ways to restore business.
  10. Review and practice the flood response plan annually.


For businesses operating on flood plains and in known flood risk areas, there are also several recommendations that form general good practice.

For example, installing flood protecting measures such as flood walls, flood doors, backflow preventers, waterproof coatings and using flood resistant materials can be actioned before a flood event and will minimize the impact of damage if/when a flood occurs.

When a flood warning has been issued, it is a good idea to have a methodical system in place for relocating equipment. Business owners may want to outline two versions of this step, depending on how far in advance a warning is communicated.

After a flood event, some companies subscribe to a disaster or flood recovery company to provide support following an event.


How can businesses access the best cover available?

Unfortunately, events which were once considered likely only once every 100 years are now happening more frequently.  Insurance companies are utilizing government tools and proprietary tools to help gauge the growing risk from flooding. Insurers will also use engineering reports to help determine if any modifications to the building have been taken to mitigate the risk of flooding, such as raised elevation, any permanent flood barriers used to protect the property.  

Businesses can educate themselves through use of these government tools and working with their broker and insurance company to have a better understanding of their own risks. Businesses will also benefit from building a flood preparedness plan in place that is regularly monitored and tested. Sharing this plan with your insurance company can help them understand how you’re managing the risk and they may be able to offer further suggestions to help you be as prepared as possible.




[3] Canada’s 2023 severe weather losses fourth costliest on record – IBC | Insurance Business Canada (


Your Contact

Your Contact

Melanie Mason

Melanie Mason

Underwriting Manager

+1 416-682-5990

Are your premises exposed to multiple flood threats?

  • River flooding - when a watercourse cannot cope with the volumes of water draining into it from the surrounding land and water breaches its banks
  • Coastal flooding – due to a combination of high tides and storm conditions
  • Pluvial / surface water flooding – when heavy rainfall exceeds the drainage capacity in a given area, and can lead to flashflooding
  • Sewer flooding – when sewers are overwhelmed by heavy rainfall or become blocked
  • Groundwater flooding – when water levels in the ground rise above surface levels
  • Reservoir flooding – failure of a dam or retaining measures could result in large volumes of water affecting local areas

These different types of flooding can vary widely across regions and occur concurrently. For example, the Rocky Mountains experience higher levels of flash flooding, whereas flooding in the prairies can be anticipated in advance. On the coast, storm surges cause erosion and rising sea levels can further intensify flooding in these areas.[1]