Companies with flood insurance whose policies were wiped out by superstorm Sandy will be able to buy extra flood cover under a new program insurance broker Aon PLC launched on Tuesday.
Flood Secure, backed by the Lloyd's of London insurance market, is not intended to backstop companies for Sandy-related losses. Instead, it is designed to provide companies insurance for future flood events if they have already reached the coverage limits in their policies due to Sandy.
Sandy caused up to $20 billion in insured losses, according to industry estimates, making it one of the worst catastrophes in history. A number of companies have been displaced from their offices indefinitely, and many have also had their business interrupted by storm-related closures and supply delays.
Aon said the new platform was not a replacement for coverage from the Federal Emergency Management Agency's National Flood Insurance Program. Many businesses take out coverage from private insurers with broader coverage and higher limits than that offered by the government program.
"While organizations may be unsure how their insurance flood limits will be impacted at this time, the facility is here to help ease that concern and provide another option for future coverage," Rick Miller, a senior executive in Aon's U.S. property insurance practice, said in a statement.