Financial Losses and Flood Damages Experienced by Smes: Who Are the Biggest Losers Across Sectors and Sizes?

Financial losses from climate-related disasters are mounting. Future climate projections reflect the size of the challenge, where the most vulnerable will be the most affected. Within the private sector, small and medium-sized enterprises (SMEs) are particularly susceptible to climate-related events like flooding. As the bedrock of almost every economy, SMEs' anticipatory adaptation is urgently needed to safeguard the socio-economic system of places at flood risk. There is a lack of understanding of the financial losses and other damages that SMEs face, which hinders flood-risk management. This knowledge gap is also often cited as a reason why flood insurance is unavailable to SMEs. This paper sheds light on adaptation priorities by examining the experience of 415 SMEs' with three different flood events in the North of the UK. Using quantitative survey research, we identified the bigger losers by sectors and sizes. By offering granularity on the commonalities and differences in financial losses, types of damages, business closure, and decreases in sales that SMEs of different sectors and sizes experienced, results pin down specific adaptation needs. Results also revealed that the smaller the business, the bigger the losses relative to their size; that the most common damages are not always the most expensive ones; and that higher magnitude flood events may likely lead to a higher number of damages. Findings can support SMEs, insurers, business chambers, the government and other supporting organisations in identifying potential risks to seek prevention and tailor programmes to build socio-economic resilience in a changing climate.