Does my business need flood insurance?

Questions and Answers Regarding Commercial Insurance

Businesses are vulnerable to the devastation caused by natural catastrophes. If you want to be protected against damage caused by floods, however, you will need to get a separate policy since commercial property insurance policies often only cover damage caused by certain kinds of natural catastrophes, such as lightning or wind. The following questions and answers will assist you in gaining a better understanding of this sort of coverage and determining whether or not it is necessary for your company.

Questions that are asked often about flood insurance

Can you tell me whether or not my business property insurance covers flood damage?

A. No. Damage caused by flooding, including flooding caused by hurricane-generated storm surge, is not normally covered by a regular commercial insurance, such as a Commercial Package Policy (CPP) or a Business Owners Policy. This is the case even if the flooding was caused by the hurricane itself (BOP). Insurance against flooding may be obtained via the National Flood Insurance Program run by the federal government (NFIP).

What kinds of things are covered by flood insurance?

A. If your home or business is damaged by flooding, your flood insurance will cover the costs of repairs. This includes losses that occurred as a direct consequence of water overflowing rivers or streams, excessive or prolonged rainfall, storm surge, snow melt, obstructed storm drainage systems, collapsed dams or levees, or other similar causes. The waters must cover a minimum of two acres or impact a minimum of two homes for them to be declared a flood. In most cases, if the water originates from above — for example, if rain or melting snow causes gutters to overflow and pour onto your inventory — you will be protected by the typical commercial property insurance policy that you have.

What kinds of losses are not typically covered by flood insurance?

A. The land around your building is not going to be covered by insurance in most cases. For example, landscaping and septic systems are not going to be covered by this policy. In addition, business vehicle damage will not be covered by flood insurance; however, it is possible to add coverage for business vehicle damage to the optional “comprehensive” section of your business car insurance policy. There is no coverage for the monetary losses that result from a disruption in company operations or the inability to utilise the insured property.

A common question: “Am I have to get flood insurance?”

A. You are obligated to acquire a flood insurance policy if your commercial property is situated in a region that is considered to have a high risk of flooding and your mortgage comes from a lender that is regulated or insured by the federal government.

Q. How can I evaluate my risk for flood damage?

A. The location of your home is the single most critical consideration when estimating the likelihood of flood damage. Is your company’s location susceptible to flooding, either directly or indirectly? (You may find search tools for flood maps on the internet.) Where exactly in the building can I find the inventory and equipment that belongs to my company? For example, everything that is kept on a floor below the ground level will be at higher danger.

Where can I get flood insurance? is the question often asked?

A. The National Flood Insurance Program (NFIP) and some commercial insurers both provide flood insurance to their customers. On the other hand, NFIP coverage can only be obtained via the assistance of a licensed insurance agent; the federal government does not sell it directly to the public. Contact the National Flood Insurance Program at the toll-free number 888-379-9531 to be sent to an insurance agent in your area who is knowledgeable about the National Flood Insurance Program.

When trying to acquire flood insurance, how long does the process typically take?

A. Before your insurance policy may take effect once it has been purchased, there is often a waiting period of thirty days beginning on the purchase date.

My question is, does my flood insurance cover mold?

A. Damage caused by mold and/or mildew as a consequence of the aftereffects of a flood is covered, but the policy takes into account the specifics of each case before making a determination. Conditions of mold and mildew that existed before a flooding occurrence are not covered, and the policyholder is responsible for adopting reasonable and acceptable mitigation efforts to eradicate mold and mildew following a flooding event.

What kinds of flood coverage are available to me?

A. If you have commercial flood insurance, you may get coverage of up to $500,000 for your structure and up to $500,000 for the contents of your property.

What happens if I need a higher level of coverage?

A. If the value of your home or business exceeds the limitations set by the National Flood Insurance Program (NFIP), you may be able to obtain what is known as excess insurance coverage. Protection against interruptions to company operations is included in excess coverage.

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