River floods can create significant financial impacts
Business Interruption Losses
Property Damages
At a glance
Risk covered
Flood
Cliente profile
Industrial Company
Insured location
Southern USA
Index
Water Level at River Gauge
case study example
Introducing parametric Flood Insurance
Context : A large river flood event in the southern United States caused significant losses of $30 million to an industrial company. Production ground to a halt as costly cleanup operations began and critical equipment was damaged. The flood’s impact also affected the company’s ability to meet vital demands of its supply chain, causing significant business interruption losses alongside the property damage.
Problem
In the aftermath of the event, their traditional E&S insurer opted to severely limit their flood coverage. Being located in a flood prone region and reliant on the relatively small limits of the National Flood Insurance Program, obtaining sufficient flood coverage became increasingly difficult.
The company found itself severely underinsured, leaving their vital production plant exposed & their broker with the task to close this gap.
Solution
Descartes can provide excess insurance coverage to bridge the gap in underinsurance. We leverage public river gauge data and the latest in scientific research to ensure comprehensive risk assessment and coverage. This solution offers robust protection, including coverage against NDBI, allowing the company to mitigate financial losses and maintain sufficient liquidity in case of severe flood events.
In this example, if the river level at the gauge were to reach 252 inches, the payout would be 25% of the limit selected by the client
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