Businesses urged to protect against climate change

Kunreuther
Kunreuther

(Corrected, June 17, 2:51 p.m.) “Flood hazards are real hazards associated with climate change and sea-level rise, but insurance premiums are often highly subsidized and insurance regulators control the rates,” he said.
“If the premiums are low, there’s no incentive for mitigation,” he said. “If the premiums reflect the real risk, property owners realize it’s not a free ride.
“We’re in a new era of catastrophes with climate change,” he added. “We have a higher degree of urbanization and more people living in flood-prone areas.
Studies have found that many property owners who don’t have insurance and suffer losses from a disaster, such as an earthquake or flood, often buy insurance after the catastrophe, then cancel those policies after a few years, said Kunreuther.
Middletown financial consultant Matthew McHenry, who works with segments that include re-insurance, the insurance bought by insurance companies, said many Rhode Island businesses are prioritizing the bottom line, rather than investing in changes to minimize the impacts of climate change.
“If there isn’t water under their feet, climate change isn’t here. They have their heads in the sand,” said McHenry.
Information is available on climate change, as well as ways to deal with potential impacts, but businesses have to pay attention, he said.
Businesses can purchase flood-insurance coverage as mandated by federal law up to the $500,000 nonresidential/commercial maximum, which is available through the National Flood Insurance Program, said Webster Bank’s Flood Disaster Protection Act Officer Don Brown, whose responsibilities cover the bank’s footprint across southern New England and Westchester County, N.Y.
Additionally, businesses can purchase flood-insurance coverage greater than $500,000 through private flood-insurance providers, said Brown.
“Businesses can’t afford to have a catastrophic flood destroy their business,” said Brown.
Brown said stringent federal policies, especially since hurricanes Katrina and Sandy devastated the coffers of the National Flood Insurance Program, mean that bank policies and procedures on flood insurance are being closely examined. •

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