The FSB believes that further investment in flood defences would make it easier for businesses and householders to get insurance which would protect them against the cost of repair.
It is urging the Government to do more to protect small firms in areas at high risk of flooding, adding that the Association of British Insurers and Government need to come to a swift decision on universal cover which ends in June 2013.
About 200 flood warnings are in force in England and Wales, with major road and rail links affected across much of the south west, Wales and Yorkshire.
The PMA reported earlier this week that a number of pubs believe they may have to close for Xmas which would have a serious impact on trade.
FSB national chairman John Walker said: “It is unacceptable that small firms are paying out what could amount to tens of thousands of pounds because they can’t get adequate insurance protection from their insurers. Nor is it acceptable that flood defences aren’t robust enough to withstand the rain.
“The money these firms are paying out could be being used to grow their business or take on more staff. Instead they have to pay themselves to repair the damage. This can’t carry on year-after-year, so the Government and insurance industry must reach a decision on the universal cover as soon as possible.
“For those firms that have cover and have been affected, their insurers should pay out quickly to ensure the business can start trading again.”