Crawford has called on businesses to review their insurance arrangements following water supply disruptions across south-east England that have forced many organisations to close or reduce operations.
Since January 8, thousands of companies across Kent and Sussex have been affected by supply interruptions. South East Water attributed the issues to cold weather, Storm Goretti, and a power cut at one of its pumping plants.
The storm has triggered a sharp rise in insurance claims across property and agricultural sectors. Approximately 10,000 homes have lost power and water, with insurers anticipating a secondary wave of claims, particularly from agricultural policyholders with livestock exposures.
Retail and hospitality businesses have been among those affected, with forced closures and service limitations leading to revenue losses. Service-based industries and the agriculture sector have also experienced operational challenges.
Crawford noted that while business interruption (BI) insurance is designed to cover loss of income and additional costs following an insured incident, coverage does not automatically apply in cases of utility disruption.
Angus Osborne-White, director at Crawford Forensic Accounting Services, said coverage triggered by a stopped water supply "will depend on whether it has been specifically requested and added to the policy." He added that such coverage is also "subject to what caused the water supply to stop and may be subject of a franchise or deductible."
Crawford stated that many insurers offer extensions to BI policies, such as "public utilities" or "utility supply" extensions, which expand cover to include losses from the failure of essential services.
Jonathan Pulley, director at Crawford Forensic Accounting Services, explained that a typical utility supply extension "may indemnify the insured for losses resulting from the accidental failure of the water supply, subject to a minimum interruption period."
However, he noted that some policies only respond where the cessation is caused by physical damage at the utility supplier's premises.
Pulley highlighted that for events such as burst water mains, "cover needs to include consideration for 'terminal ends' cover." This extension is normally triggered by an unexpected cessation of supply at the insured's premises without requiring damage at a treatment works or pumping station.
Crawford also drew attention to the distinction between franchise periods and time excesses. With a franchise, if the interruption exceeds the stated period, the insured is indemnified for the entire duration. A time excess only covers losses occurring after the excess has elapsed.
Crawford encouraged businesses to work with their brokers to understand the scope of their cover and identify potential gaps.
