Consultation on new compensation recommendations for wholesalers and retailers supporting small businesses impacted by water incidents

Water and sewerage incidents can leave small businesses unable to trade, causing significant financial losses. Existing protections do not always cover loss of earnings.

This is why CCW has published a consultation for views on our new good practice guide. This sets out recommendations for a more consistent approach to compensation, helping water wholesalers and retailers support businesses affected by unplanned incidents.

Drawing on CCW casework, research and discussions with an industry working group, the guide covers eligibility, when compensation should apply, what businesses should be able to claim for and how claims should be handled. In addition, it covers how and when business customers should be advised to use their own insurance ensuring this is fair, especially in the case of businesses being affected by multiple water incidents.

The guide recommends that wholesalers:

• make compensation available to eligible small businesses impacted by loss of supply, low water pressure that prevents them operating, water quality notices and sewer flooding
• assess eligibility using several criteria: no more than 49 employees, no more than five sites and a maximum annual net profit of £150,000
• base the trigger for compensation on 24 hours of a business’s normal opening time, rather than simply 24 hours from the start of an incident
• cover lost earnings, reasonable costs incurred to keep trading and additional staffing costs resulting from the incident
• provide clear, accessible information and a claim form, with the aim of processing claims within 28 days unless further information is needed

CCW also expects payments under the Guaranteed Standards Scheme to be treated separately and not deducted from compensation for loss of earnings.

Retailers have an important role in helping customers find the right information and understand where to make a claim. The guide highlights how important awareness of business insurance and continuity planning is to help businesses prepare for future interruptions.