New Chubb Survey Reveals U.S. Businesses Significantly Underestimate Risk from Flooding

April 2, 2024

Chubb, the world’s largest publicly traded property and casualty insurance company, today unveiled findings from a new survey that finds U.S. mid-market companies (a majority between $10 million and $1 billion) are significantly unaware of and unprepared for the risks their businesses face from flooding.

Some 85% of companies mistakenly believe their property insurance covers some, all, or most types of flooding. Further, only a small minority of businesses recognize that flooding is the most common and costly natural disaster. Taken together, the survey results show a severe underestimation of the gravity of commercial flood risk and underscore the urgent need for education around the severity and frequency of floods, even in traditionally low-risk areas.

In the U.S. alone, floods have cost taxpayers over $850 billion since 2000, accounting for two-thirds of the cost of all natural disasters. To gauge perceptions of businesses related to this risk, Chubb commissioned a survey of insurance brokers, who play a critical role in advising businesses on securing insurance coverage to help protect them from risks, including floods and other natural catastrophes. Brokers, are well positioned to understand their clients’ awareness of flood exposures and understanding of available insurance protections, as well as their familiarity with flood insurance and risk mitigation measures.

“Flood risk is far more pervasive with the increasing frequency and severity of extreme weather events,” said Louis Hobson, Senior Vice President, North America Flood Insurance at Chubb North America. “This report shows that far too many companies are unknowingly uninsured against flood risks. It is incumbent on insurance carriers and brokers to educate the marketplace and ensure organizations understand the risks of flood and the protection available.”

Key highlights:

  • Coverage Misconceptions: According to the report, 85% of companies mistakenly believe their property insurance covers some, all, or most types of flooding. Further, more than half of brokers (56%) said organizations they support do not purchase flood insurance because they assume it is already included in their commercial property policy. A large majority of brokers – 84% – report that most of their client base does not purchase any flood insurance. These findings suggest a major disconnect in perceived and actual flood protection.
  • Top Regional Underinsurance Rates: The survey revealed the South as the region with the biggest gap between the purchase and perceived need (31%), followed by the East (28%), the West (27%) and Midwest (23%).
  • Widespread Lack of Understanding: These misconceptions and coverage gaps reveal a broader misunderstanding on preventing and mitigating flood risk. More than two thirds (69%) of brokers believe a small minority of businesses know that flooding is the most common and costly natural disaster. Nearly half of brokers (45%) say their clients do not even request a quote for flood insurance coverage.
  • Inconsistent Definitions. There is also a lack of business consensus around defining the multiple causes of floods and flood exposure, with the leading perceptions focused on overflowing of a body of water (67%), inundation/heavy rainfall (56%) and surge/tidal waves (43%), among others.

These findings create a sense of urgency within the insurance industry to clarify coverage details, so that commercial property owners are not surprised when they discover their flood losses are not covered by existing policies. Businesses may want to focus on building resilience into their properties and operations to ensure they are adequately prepared for the long term.

Hobson recommends businesses consider taking the following actions:

  • Assess the risk factors that may impact their operations.
  • Seek flood insurance quotes to provide clarity on what is covered by commercial property insurers.
  • Build resilience by using an insurance carrier’s tools and technology to mitigate flood exposure.
  • Adapt to the changing reality through regular partnerships with insurers and brokers.
  • Utilizing loss prevention services including Internet of Things (IoT) devices that can help predict and prevent property damage.  Leaks and changes in temperature, humidity, or water pressure can cause damage to critical infrastructure and valuable assets.

Chubb is committed to empowering organizations to make more informed and sustainable decisions as they insure their businesses and provide services to help evaluate and create resilience.

To access the full Chubb Commercial Insurance Flood Risk Survey report, please visit