Flooding can happen anywhere, not just on the banks of rivers and coastal beaches. When it does, according to Ready.gov, the average flood claim will cost a business owner $34,000. One flood can cause catastrophic damage.
The threat of flooding is very real and can come in a myriad of ways – from overflowing rivers and streams, a storm surge, a broken storm drainage system, and more. When your commercial property is flooded, your standard insurance policy isn’t going to cover the damage. You’re going to need flood insurance.
What is Flood Insurance?
When you have a flood insurance policy, your building and the contents are protected in case of a flood. To be considered a flood, the water has to have affected at least two acres or two properties. Water coming down from above, like rain or melting snow that floods your gutters, would be filed with your general business insurance coverage.
Flood insurance is available through the National Flood Insurance Program (NFIP) with a 30-day waiting period from the first day you purchase coverage. Any business in a high-risk flood zone should purchase flood insurance, and if you have a mortgage, you may be required to buy it. Even businesses in low to moderate risk zones benefit from flood insurance coverage, and when you’re not in a high risk zone, the cost is often much lower.
How Does Flood Insurance Work?
You’ll be covered when flooding occurs from overflowing rivers and streams, heavy rains that cause flooding, storm surges, blocked storm drainage systems, and broken dams or levees. Flood insurance does not cover damage to property outside your building like landscaping or septic systems, vehicles used for your business, or financial losses caused by interruption of your business or loss of use.
The typical policy limits are $500,000 for your building and $500,000 for the contents. If your building is valued at a higher amount or the cost to rebuild would be more than the limit allows, you can purchase excess coverage. Excess coverage also includes protection for business interruption that the standard flood insurance policy does not.
In some instances, flood insurance will cover damage from mold and mildew, if it’s an after effect of the flooding. You’ll be expected to mitigate the damage and do what you can to prevent mold and mildew from forming. Whether your claim for mold and mildew after a flood will be approved is decided on a case-by-case basis.
When you’re ready to make sure your business is protected from flooding and the devastation that can go with it, contact us. We’ll answer any questions you may have and get a price quote for you.