Zurich Australia General Insurance will continue to offer flood cover as standard to its commercial insurance customers, despite the flood losses experienced over the summer.

The insurer has included flood cover automatically for most of its commercial customers since 2008, with 98.7% of its business insurance customers having flood cover.

CEO Shane Doyle says there is “major confusion with customers and the public at large on the issue of flood cover. Zurich simply believes it is the right thing to do to embed flood cover in our commercial customers’ insurance policies.

“Despite the impact of the floods much of the country suffered last year and in recent months, Zurich remains committed to giving our customers peace of mind when disaster strikes.”

Mr Doyle says Zurich has so far paid out 99.2 % of its customers’ claims from the flood events of 2010/11.

He says that while many commercial customers actually suffered no direct flood damage, in many cases they were affected by prevention of access or loss of income due to power outages.

“Throughout these weather-related disasters, Zurich has managed to rebuild or restore our customers’ businesses, be it through actual material damage of their premises or the contingent business interruption exposures.”

Mr Doyle also commended the Natural Disaster Insurance Review for raising the issue of underinsurance, but says that the industry continues to struggle with the provision of flood cover because “providing adequate flood cover isn't easy”.

“If it was, the industry would not have so many issues with implementing it.”

He says that apart from the flood cover issues, “Australians are woefully underinsured, which becomes even more relevant when disaster strikes”.

“While there is still some way to go to solve both the flood cover and underinsurance issues, the open dialogue that is happening between the various stakeholders – triggered, tragically, by the disasters – is a promising sign,” he said.