Flood Coverage
Business flood coverage helps protect your business’ physical location and contents from flood damage and can help cover repair costs to damaged property. Flood is typically excluded from business property policies and is usually as written a separate policy.
FAQs
What does a business flood policy cover?
Even a minor flood can result in major damage. Imagine you have two inches of standing water in your business—what is damaged? The answer is likely to be most of the items you need to operate. Business flood policies offer two types of coverage, building and contents.
Building coverage consists of:
- Electrical systems
- Plumbing systems
- Appliances
- Water heaters
- Foundation walls
- Windows
- Detached garages
- Staircases
- Permanently installed carpeting, cabinets and paneling
Contents coverage consists of:
- Business property such as furniture or equipment
- Inventory
- Carpeting that is not permanently installed
- Valuable items
- Curtains
- Portable air conditioners
What doesn’t flood insurance cover?
The cause of a flood plays a significant role in coverage. The NFIP defines a flood to be an excess of water on land that is normally dry and affects either two or more acres of land or two or more properties. If a flood-like event doesn’t meet this definition, it likely won’t be covered by a flood policy. Business flood policies don’t cover property outside of your building, losses due to business interruption, vehicles or valuable papers and records.
What is the NFIP?
The federal government created the National Flood Insurance Program in 1968 to protect property owners from financial losses due to flooding. The NFIP is managed by the Federal Emergency Management Agency, or FEMA. Many flood insurance policies are written by the NFIP and are federally backed. These policies have set coverage and rates that do not vary. You can also purchase flood insurance from a private insurer.
What does a business flood policy cover?
Collision is a type of auto insurance coverage that helps pay to repair or replace your car if it’s damaged in an accident. This type of coverage helps protect you financially from the expense of vehicle damage as the result of a covered accident. Whether it’s a fender bender, side swiping a guardrail or backing into a tree, collision coverage will help you get back on the road.
Do I need flood coverage?
If your business is in a high risk flood zone, a mortgage lender will likely require flood insurance prior to providing you with a business loan. Even if your business isn’t located in a flood prone area, you can still be greatly impacted by flood waters. In fact, flooding is the most common natural disaster in the United States. Flooding can occur in every region and can be very expensive to recover from. While some floods are caused by hurricanes, most flood damage is the result of:
- Thunderstorms and heavy rains
- Rapid snowmelt
- Levee and dam breaches
Wildfire prone areas are also at a greater risk of flood because they alter the landscape, causing rainfall to create flash floods. Areas that are near major developments are also vulnerable as changes to the natural flow of water can trigger a flood. With over 20% of flood claims coming from properties outside of the high-risk flood zones, purchasing flood insurance can keep your business above water.
When should I buy flood insurance?
It is a smart decision to purchase coverage before you are at risk of flood loss. Once a flood policy is purchased, there is a 30 day waiting period, as established by FEMA regulations, before your flood insurance takes effect.
What does business flood coverage cost?
Cost depends heavily on if your business is located in a high-risk or low-risk area. Understandably flood policy premiums are higher if your business is situated somewhere that is prone to flooding. Deductibles also affect premiums; the higher your deductible, the less premium you’ll pay but keep in mind that higher deductibles mean less coverage. Other factors at play in determining flood rates are: type of construction, age of property, number of floors and building occupancy.