Learn about flood insurance coverage for businesses.
Most business owners are shocked to hear that their standard commercial insurance coverage excludes flood coverage. For many, they find out when they’re knee-deep in flood water in their business’s location. Floods can occur from heavy rain, storms, broken damns, blocked storm drains, mudslides, and more. Flooding isn’t limited to coastal areas, which is why it pays to ensure your business is protected. Fortunately, you can act now to ensure that you have the right coverage for your business, including flood protection.
What is flood insurance?
Commercial flood insurance is a specific coverage designed to protect your business from the financial costs of flood damage. While property insurance policies provide coverage for your property in the event of an accident or natural disaster, flood damage is commonly excluded from these policies. Flood insurance is offered by the Federal government through the National Flood Insurance Program (NFIP). However, if you want higher limits of coverage, you may need to work with a private insurer.
Who needs coverage?
Any business can flood, regardless of location and previous flood history. Federal Emergency Management Agency (FEMA) has mapped out flood zones, which can help to determine whether you need flood insurance coverage. If your business is located outside of the flood zone, flood insurance may not optional. Keep in mind that businesses outside of these high-risk areas file 20 percent of flood insurance claims and benefit from one-third of flood insurance payments. If you could not cover the cost of flood damage, consider taking out a separate flood insurance policy.