In the aftermath of Superstorm Sandy, many corporate risk managers whose organizations had experienced a flood loss found their companies facing a new exposure. Because the financial limits of their existing insurance policies were exhausted, they were on the hook for additional financial losses in the event of another flood.

Following Sandy's catastrophic losses, many insureds were unable to access additional capacity, or were forced to reinstate limits of existing policies at much higher costs, stricter coverage terms or substantial increases in deductibles. One year removed from Sandy's destruction, this threat continues. Massive flooding has also devastated the cities of Calgary and Toronto in Canada, as well as Boulder, Colorado, providing a stark reminder of the need for broad property insurance protection.

For businesses experiencing losses caused by severe flooding, financial impacts come from multiple sources — from the deductibles they pay, the vertical shares of risk they absorb in the core program and the risks they assume above the insured limits of the program. The potential inability to reinstate much-needed insurance limits is an added financial strain that can occur after a flood loss like Superstorm Sandy. Insureds may have very little to no insurance protection remaining until their property policies are renewed, and even then they may not be able to acquire the same limits as before.