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Having flood insurance along with your commercial property insurance is necessary to protect against flood damage. Depending on the size and value of the property, the cost of a flood insurance policy will vary.
Before selecting a flood insurance policy, make sure you know what will and won’t be protected.
The cost of flood insurance is minimal compared to the safety and peace of mind it can provide for business owners. For the most comprehensive flood insurance policy and rates for your area, it’s best to shop around with different insurance companies.
Your lender may require flood insurance coverage during the mortgage process if your property is in an area considered a flood risk.
Commercial flood insurance premiums can cost a few hundred dollars a month up to several thousand dollars a year. The best way to calculate the amount of commercial flood insurance you need and what is needed in a flood insurance policy is to consult with an insurance agent.
An insurance agent will research if you are in a high-risk area for flooding or a flood zone. They will then discuss what type of property coverage you may need if your property is flood-prone and what can happen if your property is damaged by floodwater.
The insurance agent will also discuss a deductible and other types of policies like contents coverage to protect any items in the building that wouldn’t be covered under flood insurance.
Yes, the National Flood Insurance Program covers commercial floods and ensures that business owners, homeowners, and renters have help when they need it most.
The NFIP’s General Property Form offers commercial policyholders the following coverage:
For businesses, “personal property” describes the contents of your business.
Floodwater can cause all sorts of damage. If there is a natural disaster like a hurricane, large storm surges can breach levees creating greater opportunities for flooding.
Not all flooding is weather-related. Flooding can happen if a pipe bursts on the street and the water floods into your building. In this case, a comprehensive flood insurance policy will protect you if your building or contents are damaged.
Under the National Flood Insurance Program policy, property owners with building coverage can expect their electrical, heating, and water heater systems to be covered. Building coverage will also protect appliances and permanently installed carpets, wall paneling, cabinets, and staircases.
Your business will likely be put on hold during and after a flood. Business interruption is when a business closes temporarily due to a natural disaster or a disruptive circumstance, leading to a loss in profits. Unfortunately, flood insurance doesn’t cover business interruption or profits lost due to flooding—even if a natural disaster causes the flood.
However, flood insurance does cover most of your property, depending on the type of commercial insurance coverage you have (also known as a Commercial Package Policy (CPP) or a Business Owners Policy (BOP)).
If your business experiences commercial flood damage, your insurance will cover the costs associated with restoring your building and services like heating and electric wiring. If you also have contents coverage, items like furniture and electronic equipment will be covered as well.
There is a big difference between private flood insurance and FEMA. A homeowner, renter, or business owner can expect only to receive support from FEMA if the federal government declares that the area needs funding to recover from any flooding created by a natural disaster.
Most of the time, for FEMA to provide funding, the President of the United States must make an emergency disaster declaration. Unfortunately, this process is time-consuming and does not always result in sufficient funding.
It’s also important to know that FEMA assistance isn’t free, and if awarded, the funding must be repaid as a loan with interest. Floodsmart.gov is a good resource for more information about the FEMA process.
Having private flood insurance can protect your property even if a natural disaster didn’t cause your flood damage. Private flood insurance also means that you can help repair your property and replace the things that mean the most.
Instead of an extended business interruption with no end in sight, private insurance can help you get on your feet and back to business sooner.
While flood insurance isn’t free, the cost to have it is well worth it. When a flood has damaged your home or business, make sure to contact ATI Restoration right away. ATI Restoration is the leader in cleaning up the mess that flood damage leaves behind.