The Rising Risk of Flood

Three powerful ways for businesses to combat a growing hazard

Studies show that flood is the most expensive of all natural hazards, costing companies an average of US$6 billion in insured losses annually—yet most flood loss is both predictable and preventable.

Our world's climate is changing, and some weather patterns are shifting. Property loss from natural catastrophes has been, and will continue to be, ever more costly, due to the rise in world population, a rise in value at risk, the increasing vulnerability due to globalization of business and growth of outsourcing, and the rapid development of emerging markets which are less resilient.

More businesses are questioning if they're doing enough to prepare for and adapt to these catastrophes. FM Global constantly evaluates the implications of natural catastrophes and develops innovative methods and practical engineering solutions to improve its clients' resilience to business interruption and mitigate potential property loss.

But just how should businesses plan to stem the rising tide? The obvious response is to locate in an area far from low-lying river, coastal or other flood-prone areas. If that isn't possible, however, there are some proactive steps businesses can take to reduce their risk of potential flood damage and business interruption.

Stuart Ulsh, a senior engineering specialist at FM Global and flood hazard expert, acknowledges that flood preparation and awareness is key. "Facilities located within high-hazard flood zones will eventually experience major flooding. In addition, we have always recommended that clients not build in moderate-hazard (500-year flood-exposed) areas. Building codes and regulations are now calling for critical infrastructure occupancies, such as utilities, emergency services, schools and hospitals, to build higher or protect against the 500-year flood level."

Nearly one in 10 commercial facilities are already located within a flood zone, and the best loss prevention practice for these properties is unremitting vigilance. Facilities at risk for flooding must prepare well in advance to keep water out of business-critical areas, and limit downtime and service interruptions. Smart businesses have a clear plan for what they will do when flooding is imminent, including choosing the best location for their flood barriers, sealing walls and floors, and providing flood pumps and other mitigation equipment that will help maintain business continuity.

Among the preparations businesses can take to reduce the impact of flood, Ulsh recommends permanently moving all electrical, computer and telecommunications equipment safely out of low-lying interior and outside areas to settings above the flood level. He also suggests using sump pumps and backflow valves to handle water seepage and prevent drains and sewers from allowing water to enter a flood-protected area; relocating high-value stock and equipment; and installing permanent or temporary barriers to protect buildings against flood waters.

"While a business can't prevent a flood from occurring, it can enhance its resilience by getting its property ready for whatever precipitation extremes it's likely to experience," says Ulsh. "This can't happen, however, if a sufficient contingency plan is not in place. Without one, buildings, machinery, data centers, transportation networks, supply chains, employees and customers are all at risk."

Raising the bar in flood mapping
As the number of extreme flood losses continues to rise, the task of accurately evaluating flood risk and recommending appropriate mitigation strategies, products and services is gaining momentum.

Local flood maps are available in many countries covering major urban communities. These maps focus primarily on highlighting high-hazard flood zones—those greatest at risk of flood from rivers and seas.

To help businesses worldwide expand into areas where information on flood potential is lacking, FM Global's researchers recently developed global flood maps to aid in making more informed choices on how to best keep flood waters at bay. Technological improvements in data acquisition have made it possible for global flood maps to be generated with more ease than ever.

Using an innovative flood mapping model that is based on physics and includes historical, elevation and updated precipitation data, the global flood maps help businesses identify areas exposed to moderate-frequency (500-year) and high-frequency (100-year) flood events—which is especially critical in parts of the world where flood data is deficient or inconsistent. This includes parts of Africa, Asia, Australia, Central America, Eastern Europe, Latin America and Western Europe.

Knowledge is power
While the global flood maps are a vital resource, when paired with scientifically based FM Global Property Loss Prevention Data Sheet 1-40, Flood, they deliver a potent one-two punch in preventing and mitigating losses due to flooding and stormwater runoff.

Incorporating nearly 200 years of property loss experience, research and engineering, as well as input from consensus standards committees, equipment manufacturers and others, Data Sheet 1-40 was recently amended with updated information and insight, such as Understanding Flood Sources and Their Characteristics, which explains how quickly floods can arrive based on a typical exposure and how to plan a mitigation strategy; Selecting Barriers to Protect Building Openings offers an expanded overview of typical flood-protection devices; and Flood Maps and Data has been expanded (and retitled), along with many others.

The data sheet can be accessed at or via MyRisk®.

Central to the success of the global flood maps and Data Sheet 1-40 is the expertise and customized loss prevention counsel FM Global also provides its clients. According to Ulsh, helping clients analyze their unique flood scenarios prepares them to implement the best solutions for when a disaster strikes.

Navigating the Wild West
The frequency of major flooding events worldwide has resulted in an uptick in the number of manufacturers offering flood mitigation products, such as temporary perimeter barriers, opening barriers and backwater valves, to help prevent floodwater from entering a facility.

While manufacturers have developed many new flood abatement products, not all  have been tested and certified. With so many products on the market, choosing a company to bring a validated, permanent solution is challenging.

That's where product certification organization, FM Approvals, can help.

Working in tandem with FM Global's research and engineering teams, FM Approvals partners with product manufacturers around the world to rigorously test and certify flood abatement products. Today, 52 different FM Approved flood products are listed in the Approval Guide, a comprehensive web-based reference database owned by FM Approvals and used by loss prevention industry specialists to identify quality loss prevention products.

According to Rich Ferron, operations vice president and manager of testing and certification for FM Approvals, Approval Standard FM/ANSI 2510, American National Standard for Flood Abatement Equipment, is the only standard in the world that evaluates the performance of the product in real flood conditions and the components and materials that comprise the product.

The standard is recognized by the world's leading regulatory authorities, including the Association of State Floodplain Managers (ASFPM), the U.S. Army Corps of Engineers and the American National Standards Institute (ANSI).

Take action today
To excel in today's ever-changing global climate, it's imperative for businesses to consider and approach flood mitigation differently than they have in the past. There's no time like the present to take action against their flood vulnerability and embrace products and methods that make organizations more resilient to property loss and business interruption.

"We want our clients to ask the tough questions. We want them to do the right thing," says Ulsh. "That only comes when clients understand the solutions. We have found that when clients grasp the flood scenario and potential impact to their business, they're more motivated to pick the right prevention remedy."


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