Optima Insurance Brokers Pvt. Ltd.


Our views on important risk issues and emerging risks.

Monsoon Advisory

Last so many years India as well as other parts of the world have been plagued by the vagaries of flood and high tides, which brought along with mass destruction and loss of property. While the right insurance cover does bring some financial relief to the owners, insurance does not cover losses like loss of market share, loss of reputation, rebuilding the position one occupied prior to the catastrophe struck etc. Hence their no alternative to taking some basic precautions to avoid such losses.

The following paragraphs mention some simple steps which can help any organisation mitigate the possibilities of damages due to flood:

  • Warehouses have felt the maximum impact of flood in the recent years. The following measures can go a long way to reduce the impact, if not avoid the losses :
    • Many of the warehouses are hired and to avoid high rentals warehouses located in low lying areas are preferred. This should be avoided to the extent possible.
    • If occupying a warehouse in low lying area is unavoidable, the owner of the goods should ensure the following ….
      • Avoid basement storage …preferably the storage should be done in the first or higher floors .
      • If the storage has to be done on the ground floor, the goods need to be kept on a platform/ pellet / metal racks which have good clearance from the floor .
      • The goods (particularly the ones hygroscopic in nature or prone to water damage) need to be provided with an extra water proof packing in addition to the manufacturers recommended ones .
      • The entry to the warehouse should be having a slope towards the outside and under no circumstance the level should be lower or of same level as the adjacent road.
      • Completely avoid storage in open or even under sheds which are open from sides. Construction materials like cement should always be kept inside at construction sites , particularly during the monsoons
  • The above & the following standard operating procedures can be adopted for not only warehouses but also for other occupancies :
    • Higher plinth level of the factory/ warehouse as compared to the adjacent locations , so that water accumulating in the surroundings do not find its way inside .
    • The drainage system should be checked and maintained on regular basis.
    • It always helps to have pump and sump facilities to help draining out water if they enter the premises.
    • The manufacturing units should be ideally located some distance away from the boundary wall.
    • Regular follow up with authorities to improve / repair the drainage facilities of the area,
    • While storing keep a clear space of two feet from the walls ( particularly the external walls ) to avoid damages to stocks due to seepage of water through the walls ( happens when the adjoining road is inundated )
    • Monitor closely to avoid chocking of drains due to waste materials entering and clogging the same.

The above measures may not necessarily any damages due to flood , but can go a long way to minimise the impact .

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Optima’s core group has more than 100 man-years of experience in insurance. Our experience has trained us in reading the fine print of insurance policies, understanding it and applying it for the benefit of our clients.

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