Pertinent Perils

Record-setting rainfall spurred heavy flooding in much of the Northeast, including my home state of Rhode Island. During the month of March, more than 15 inches of rain fell on the state’s capital, Providence, an all-time record. The floodwater has begun to recede, but the cleanup of what is the worst flooding in 200 years will take some time. The pain is particularly acute as the state already has one of the highest unemployment rates in the country, close to 13% and, with a budget deficit, few resources to fund relief programs. Life has yet to return to normalcy, with National Guard troops deployed in the state, nonessential government workers given time off and schools and businesses, including the University of Rhode Island, closed. Transportation has been disrupted, as stretches of Interstate 95, the highway connecting Boston to New York, were closed. Amtrak suspended train service, as tracks were submerged underwater. The Rhode Island Emergency Management Agency has asked residents to limit their use of electricity and water owing to flooded electrical substations and sewage systems. Public health officials remind residents exposed to floodwater to wash their hands carefully to protect against bacterial and viral infections. The President has issued an emergency declaration for the state, thereby engaging the Federal Emergency Management Agency to coordinate federal relief aid programs. Relief for residents and small businesses, however, is likely to be limited. RI residents were given an extension, until May 31, to file their state and federal income taxes. However, in terms of direct aid, small businesses should not expect much. FEMA programs are generally designed to rebuild public infrastructure, not to provide private assistance. Businesses can adjust their taxes for uninsured losses, such as flood-damaged inventory. But this is where an appropriate insurance program, including business interruption insurance, is critical.