In early December 2015 Storm Desmond breached flood defences and inundated large swathes of Cumbria and Lancashire. Tens of thousands of households and businesses were left without power, and the raging torrents caused untold damage to property and infrastructure.
The Honest Lawyer Restaurant, a business that only opened in 2014, found itself five feet underwater despite comprehensive flood guards. The restaurant is based right next to the River Cocker, and is half located in the basement.
Owner George Cherian hopes he will reopen in time for Valentine’s Day In the meantime there is no income and he is paying staff (nine at peak times) out of his own pocket. On top of this and the thousands of pounds he has lost in fixtures, fittings and appliances (at least £60,000), Cherian is currently making a 200-mile round trip to work and back from his home in Grasmere (20 miles away) because of the structural damage to the A591. “The Army has come in, but it could be five to six months until the road reopens,” he says.
Percy House Gallery, established in Cockermouth’s oldest town house (a listed building dating back to 1390), was flooded to a depth of three feet (0.9 metres). This wasn’t as bad as in 2009 when the water reached the groundfloor ceiling, so the defences did help – as did the waterproof coating it subsequently applied to the walls.
Even so, the gallery lost up to £8,000 in business during the week it was closed – a time that would usually be very busy, in the runup to Christmas. Fortunately most of the stock, insured by individual artists, had been moved to higher ground.
Even above the waterline, businesses have been badly affected. Limelighting, a lighting and electrical goods retailer, expects trade to be at least 10-15% down for several months until the town centre is up and running again properly. Company secretary Sue Hannah believes the business has little chance of recouping the losses. “In the 2009 floods, the hit was about 25%, but there’s no insurance for losing business because the town centre is flooded,” she says.
So how are businesses approaching the big clean-up, and what help is available?
Customers and community
The internet has provided an easy way to keep customers informed, and access help and advice. The Honest Lawyer restaurant has notified its clients via its web pages that it is temporarily closed but working hard to reopen as soon as possible – a status it will keep updating. Volunteers rushed to help with the clean up, and the local council has been “really helpful”, Cherian says. “They have provided dehumidifiers to dry out the building, and found us grants to apply for.”
Percy House Gallery has been similarly overwhelmed by the kindness of locals. “We’re a very small town but there has been lots of help, from loans of dehumidifiers, to soup and sandwiches from the church, and offers from the Rotary Club and customers,” co-owner Viv Austin says.
Insurance
In any crisis, it’s important to initiate an insurance claim swiftly and to start gathering evidence before beginning to put right any damage. The building housing The Honest Lawyer restaurant is insured and the landlord is already getting on with repairs, but Cherian is concerned about what his own payout might be. It took him a few days to get through to his insurers; in the meantime he has been documenting the damage and sizing up the clean up operation.
He expects to be adequately covered for contents insurance, but the loss of revenue is a concern. “They won’t give interim payments, and I can no longer afford to pay staff as this is my only income,” he says. “I don’t know what we’ll get, as a new business that’s still building up profits. I’m also worried about what this will do to my excess in future. Will I be able to afford it?”
Cleaning up
Percy House Gallery has a £5,000 excess on its insurance policy due to the flood damage it suffered in 2009, so it is doing as much of the clear up as it can under its own steam. With everyone doing their bit and putting in long hours, the gallery reopened within eight days of the initial breach. “Given our high excess we decided not to wait for insurance assessors, but just to get back up and running,” Austin says.
This was important for cashflow reasons, enabling the business to keep paying overheads and staff. “Ongoing, we have lost the use of one display room due to the floods and fear high electricity costs for the dehumidifiers and extra drying out,” she adds.
Grants
Like The Honest Lawyer, Percy House Gallery is looking at the grants available for businesses in its position. These include a Flood Recovery Grant. In addition to help from the council, local business groups such as the Cockermouth and District Chamber of Trade are proving a valuable source of information and help.
Help with cashflow and capital
A good bank will be sympathetic and keen to offer practical financial help, such as rapid access to loans, overdraft extensions, reduced payments, payment holidays and asset finance.
Mark Winters, regional managing director for NatWest Business Banking for the north of England, says its relationship managers were quick to call customers affected by the recent floods. “We were sensitive to the time of year, knowing that retailers had just stocked up for Christmas only to find stock destroyed overnight,” he says.
Branch closures have hit some small towns and villages hard, but NatWest has addressed this gap with a mobile banking system. Two mobile branches serve Cumbria, where business managers as well as consumers can meet bank staff face to face.
“Insurance pay-outs can take months, which affects cashflow,” Winters notes. “We can help by agreeing overdraft facilities, or allowing businesses to go into excess. The important thing is to keep in touch.” NatWest’s teams in Carlisle and Lancaster have provided practical support too, donning their wellies to join the clean-up.
The worst thing businesses can do in a time of crisis is suffer alone, so if in doubt – reach out.
This advertisement feature is paid for and produced to a brief agreed with NatWest, sponsor of the winning new business and business essentials hubs.
