How can businesses prepare for and recover from flooding?

Aerial view of a flooded town with brown water covering streets and surrounding buildings.

Everett McCallum, Director, Technical Risk Services, Echelon Insurance — **Everett McCallum**,
Director, Technical Risk Services,
Echelon Insurance

According to the Institute for Catastrophic Loss Reduction (ICLR), flooding is the most common weather hazard individuals and businesses will face. Looking ahead, the annual cost of flood damage to homes and buildings in Canada is projected to increase substantially. According to the Canadian Institute for Climate Choices, by mid-century, these costs could amount to over $5.5 billion annually, driven by factors such as extreme rainfall and coastal flooding.

Impact of flooding on businesses

For business owners, floods pose risks to assets such as goods and storefronts and can adversely affect business continuity as well as staff and customer safety. It is imperative for business owners to work in collaboration with their broker and insurer to implement strategies to mitigate potential flood damage.

Unsure of which strategies to implement before, during, and after a flood takes place? Below is a summary of key tactics that should be included as part of an effective flood preparedness and response plan.

Flood preparation

To ease the stress associated with last-minute preparations, measures that can be taken well in advance of a potential flood include, but are not limited to:

Establish a team responsible for developing and implementing a business continuity plan. To get a head start on continuity planning, download the RiskIntel^TMBusiness Continuity Toolkit.
Offer annual training on flood event procedures for all staff involved in building operations and routinely assess policies to ensure they remain relevant based on current business needs.
Apply physical barriers to commercial premises, including sealants around basement windows and ground-level door assemblies. Install window wells and covers to windows that are near or below ground level. Consider installing a sump pump and backflow preventer in basement areas.
Business owners should work with their broker to review their insurance annually, or more frequently as needed, to ensure their coverage meets their overall needs but specifically in the event of flooding. Though most commercial property policies include some level of water damage coverage, flood and sewer backup coverages may contain sub-limits, high deductibles, or be excluded outright for those in high-risk areas and who may need it most. It’s important to review policy details with a broker to ensure the necessary water-related risks are covered adequately.

Impending flood preparation

When a flood is forecasted to occur, there are actions that should be taken to help reduce damage to commercial property including, but not limited to:

Activate and communicate the business continuity plan to staff and follow documented procedures to shut down equipment that may be affected by the flood.
Critical equipment such as fire alarms, fire pumps, and sump pumps should remain operational and connected to an emergency generator, if available.
Relocate any materials susceptible to flood damage, such as electronics or vital business records, to an upper floor.
If instructed by authorities to evacuate, do so as soon as possible. Ensure that all employees are informed about evacuation details.

Flood Recovery

Though returning to a business after a flood can be an overwhelming experience, steps to safely and effectively navigate the recovery process include, but are not limited to:

Avoid entering damaged buildings before their structural integrity is thoroughly evaluated.
Notify local utility companies if power lines are down or gas leaks are detected.
Document property damage and take photos and videos of damaged equipment and stock.
Business owners should notify their broker and/or insurance company of potential losses. To expedite the claims resolution process, requested claim forms should be completed as soon as possible. For guidance on what information to gather and how to report a claim, download the RiskIntel Claims Reporting Checklist.
If water has entered a building, remove it from the premises as soon as possible to reduce damage and contamination using dehumidifiers and submersible pumps.

Brokers and insurers play an important role in supporting customers by providing tailored advice and resources to mitigate damage caused by floods effectively, and by ensuring customers have access to the right support during unexpected incidents.

To help business owners get a head start on preparing for potential flooding incidents, download the RiskIntel Flood Preparedness and Recovery Guide.

Copyright © 2025 Echelon Insurance. All rights reserved. This article is provided by Echelon Insurance to assist commercial enterprises in identifying conditions that may lead to liability and property risk exposure as a result of floods and taking proactive steps to respond to and mitigate these risks. While we believe this article is comprehensive, it is provided “as is” and we do not guarantee it is complete. All responsibility and risk relating to specific incidents, including use of this form, are assumed by the commercial enterprise. ^TM Trademark of Echelon Insurance. ® Registered trademark of Echelon Insurance.