Summer flooding means that the UK's small businesses will soon be hit with a five per cent rise in their commercial insurance premiums, according to the latest reports.

Insurance brokerage Jelf says that it has been told by three major UK firms that commercial insurance premiums will increase, says thisismoney.co.uk. The across-the-board rises will be implemented by the end of the year and will specifically target small businesses, according to the report.

Premiums for larger firms will be left untouched, the website adds.

The floods are being used as an excuse to push through the rises, Jelf's managing director of commercial business, Gina Dixon, says. The increases were already expected at the end of 2008, but the majority of the industry will follow these three major insurers' lead, claims Ms Dixon.

"Because small businesses operate on tight profit margins they have to constantly assess risk and work out whether insurance is worth it," Simon Briault, spokesman for the Federation of Small Businesses, told the financial website.

"Before the summer a lot of businesses decided not to take out flood insurance and got caught out, which is why we set up a £500,000 emergency fund to help those affected. In an ideal world small businesses would take out insurance for everything."

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