Most business insurance policies don’t cover losses resulting from floods, and if you’re located in a low-risk flood area, you might be tempted to bypass this important coverage. However, flooding can occur anywhere – it’s not limited to just coastal areas or river basins. The cost of damages from a flood could submerge your business permanently.
Buildings Coverage
Flood can cause a major damage to floors, walls, ceilings, plumbing, electrical systems, and HVAC.
Contents
Flood can damage furniture, fixtures, inventory, machinery, equipment, and other property owned by your business and you need to pay the expenses for their replacement.
Increased cost of compliance
Cities and communities usually update their building standards over time in order to reduce damage from floods. If your building was built before the current standards took effect, you may incur additional costs to rebuild or bring your building up to the current flood management standards.
Prevention, Protection & Clean-up
The most common and effective form of flood protection before a storm is sandbagging.
A storm or a flood can damage your contents and you need to pay for the clean-up of debris.
Excess coverage
If you need higher limits of coverage beyond the NFIP limits, you can purchase excess coverage from a private insurer.
Flooding is a risk to any business, whether you are inland or near the coastline. In fact, one in four businesses that shuts down from a natural disaster never reopens, and more than 80 percent of all presidentially declared natural disasters involve flooding. According to the U.S. government, the average commercial flood claim in the past 10 years has been around $33,000, and property damage due to flooding usually adds up to more than $6 billion annually.
Floods have many causes and can occur anywhere in the country, but here are some of the most common events that lead to flooding:
You should be aware that a general policy will not cover flood damage, and this type of insurance is only available through the National Flood Insurance Program (NFIP). The NFIP will cover all the types of floods discussed above, including mudslides, though it is important to note that it does not cover landslides even if they are caused by heavy rain. To make sure you get a fair price, every commercial flood agent answers to this government agency; therefore, flood insurance is backed by the government but sold through private insurers.
Flood insurance covers damage to your building and contents caused by flood. This includes losses resulting from water overflowing rivers or streams, heavy or prolonged rain, storm surge, snow melt, blocked storm drainage systems, broken dams or levees, or other similar causes.
To be considered a flood, waters must cover at least two acres or affect two properties. Generally if water comes from above—for instance from rain or melting snow overflowing gutters and leaking onto your inventory—you’ll be covered by your standard commercial property insurance.
If your business or property gets damaged from floodwater, commercial flood insurance can help cover your repair costs.
Commercial contents:
Commercial contents cover inventory, merchandise, machinery and any other contents your business has up to $500,000.
Commercial building:
Commercial building covers your company’s building up to $500,000. Even if your company does not own the building, you are able to insure the value of the improvements you made to space.
If the value of your business is more than $500,000 in either of these areas, you can purchase an excess flood policy to provide total coverage up to $1 million. In addition to these two types of building coverage, the NFIP will also keep you covered for flood protection, prevention and cleanup.
Connect with us to know more about commercial flood insurance.
Most commercial property insurance policies don’t cover flood damage. So, you may want to buy commercial flood insurance to help protect your business and personal property.
Even if your business isn’t in an area prone to flooding, you’ll want commercial flood insurance if:
You run your business in an area that has cold, snowy winters and warm springs. Fast-melting snow is one of the top causes for commercial flooding. You experience moderate rainfall in the spring. A nearby stream overflows from the rainfall, flowing into your place of business and causes flood damage.
Your business’ basement floods from construction runoff next to your building and damages equipment and inventory.
It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options
If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.
Contact us today to help you with multiple options to choose from.