TY  - JOUR
A1  - Hudson, Paul
A1  - Thieken, Annegret
T1  - The presence of moral hazard regarding flood insurance and German private businesses
JF  - Natural hazards : journal of the International Society for the Prevention and Mitigation of Natural Hazards
N2  - There is a movement towards the concepts of integrated flood risk management and governance. In these concepts, each stakeholder prone to flooding is tasked with actively limiting flood impacts. Currently, relatively more research has focused upon the adaptation of private households and not on private businesses operating in flood-prone areas. This paper offers an extension of this literature on business-level flood adaptation by exploring the potential presence of moral hazard. The analyses are based on survey data collected in the aftermath of six floods across Germany between 2002 and 2013 to provide a first indication of the presence of moral hazard in private businesses. Moral hazard is where increased insurance coverage results in policyholders preparing less, increasing the risk they face, a counterproductive outcome. We present an initial study of moral hazard occurring through three channels: the performance of emergency measures during a flood, changes in precautionary behavior employed before a given flood occurred, and changes in the intention to employ additional precautionary measures after a flood. We find, much like for private households, no strong indication that moral hazard is present regarding past adaptation. However, there is a potential avenue after 2005 for insurance coverage to lower businesses' intentions to employ more adaptation measures after a flood. This has significant policy relevance such as opportunities for strengthening the link between insurance and risk reduction measures and boosting insurance coverage against flooding in general.
KW  - Flooding
KW  - Risk reduction
KW  - Private businesses
KW  - Insurance
KW  - Moral hazard
KW  - Company
Y1  - 2022
U6  - https://doi.org/10.1007/s11069-022-05227-9
SN  - 0921-030X
SN  - 1573-0840
VL  - 112
IS  - 2
SP  - 1295
EP  - 1319
PB  - Springer
CY  - Dordrecht [u.a.]
ER  -