UK: Construction Flash Flood Risk – When It Rains It Pours

$50B

U.S. insurers experienced the costliest SCS year on record: total claims exceeded $50 billion

Climate warming worldwide has led to increased unpredictability of weather patterns. In 2023, the economic impacts of severe convective storms (SCSs) and floods became a focal point for risk managers as U.S. insurers experienced the costliest SCS year on record: total claims exceeded $50 billion¹. In the UK, rainfall events exceeding 20mm/hr are projected to be 4 times more frequent by 2070². This evolving situation necessitates a proactive approach to risk identification, mitigation, and adaptation.

Flash flooding occurs when rain falls so fast that the underlying ground cannot cope, or drain it away fast enough where roads can become like rivers with devastating consequences. SCSs, defined as rainfall exceeding 20mm/hr, are typically responsible for flash flooding. SCS projections are used in construction planning to assess surface water drainage and flood risk. Small, steep catchments and urban areas are particularly vulnerable to flash flooding. The projected increase in extreme precipitation necessitates risk awareness and mitigation even in areas that have not historically experienced flood related losses.

Quantifying flood risk in construction projects

Construction projects are inherently dynamic and progress through many phases, including groundworks, plant/building erection, plant/building fit out and closure, commissioning, and handover. Natural hazard exposure should be carefully considered throughout the project life cycle. Flood risk in particular is often characterised by the project phase and should be a crucial consideration from the beginning of the conceptual design phases. The rapid inundation that characterizes flash flooding makes preparation and mitigation essential at these early stages, to avoid catastrophic losses later in the construction timeline. Delays and protracted handovers between project phases are increasingly common following flooding, adding unanticipated complexity to project risk management considerations.

Early construction activities, including ground works prior to building, have a bearing on natural site drainage and safe run-off, and can leave large areas exposed to flood. The site's elevation profile, ground conditions, and temporary drainage should be considered in the design phase, prior to these activities.

Prior to the plant/building being water-tight, there is a reliance on temporary protections that are often less robust than the permanent solution, increasing risk during these earlier phases. Following plant/building fit-out, there is increased financial risk that puts focus on the adequacy of permanent protection. This is particularly relevant for ultra-clean manufacturing plants common in the food processing, pharmaceutical and high tech industries.

Risk strategy and mitigation

Flood exposure to on- and off-site fabrication, storage and laydown areas is often critical to timely project completion. Risk mitigation strategy should also consider exposure for these assets; and for the project site, coverage should be arranged to carefully consider this exposure.

It is important to develop a risk mitigation strategy that addresses monitoring during the project life, often through a project risk register, and details the actions to be taken during a flood event. There are a number of platforms to support this intelligence that address appropriate safeguarding of your project value. In view of the anticipated increase in flash flooding events, preparation and mitigation are critical primary means of control, however insurance coverage is a strategic risk transfer mechanism that can manage risk for the project duration.

Flood risk for both on and off-site assets can be modelled by an increasing number of predictive tools supported by insurers experience. These consider multiple risk profiling metrics including base flood risk including likelihood, intensity and duration of water entering the site, internal and external water flow behaviours on and into the site, excavations and drainage and construction, vulnerability and mitigation. This provides data to allow flood loss estimation, determining liability and coverage required.

Footnotes

1 Natural Catastrophe Review July - December 2023." WTW Research Network. U.S.-insured losses from natural disasters push global tally more than $100 billion in 2023' Reuters, October 2023.

2 Kendon, E.J., Fischer, E.M. & Short, C.J. Variability conceals emerging trend in 100yr projections of UK local hourly rainfall extremes. Nat Commun 14, 1133 (2023).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.