Commercial Flood Insurance: 3 Important Facts To Know

7/1/2021 (Permalink)

Flooded Building

Commercial Flood Insurance

Flooding may spring from a multitude of causes, including structural malfunctions (pipes bursting, waterlines leaking, etc.), storm surges, overflow of existing water bodies and more. According to the Natural Resources Defense Council, Inc, climate change has exacerbated weather conditions around the globe. Floods, which are common and potentially devastating natural disaster events in the U.S., are projected to increase in both frequency and severity as sea levels continue to rise and storms worsen. With this, there will be a correlating spike in the need for the services of a professional cleanup and restoration service in North Clay County - Orange Park, Fl, and other expert contractors. It is therefore important to consider commercial insurance, specifically flood insurance.

1. Flood Coverage Is Usually Not Included in Property Insurance
Many individuals fail to realize that most standard commercial property policies do not include commercial flood insurance. This means damage from flooding (water damage) is not covered.

2. If a Business Meets Certain Criteria, Flood Coverage Is Required
Businesses must have it if they are located in a high-risk flood area and possess a mortgage courtesy of a federally regulated lender. An insured lender may also force them to buy coverage. To find out if a building resides in a high-risk flood area, the owner can look at the FEMA flood maps through the organization's Flood Map Service Center online portal. Letters denote the hazard level, with high-risk zones starting with either "A" or "V," where "V" signals coastal areas.

3. Flood Coverage Is Available From the Government or Private Insurers
Some private companies offer commercial flood policies. The NFIP is another potential source of coverage. Managed by FEMA, it was established by Congress in 1968 and offers insurance to business owners among others. This coverage must be obtained through a professional insurer — a business owner cannot simply purchase it from the government.
With the growing weather and climate change threats on the horizon, proper commercial coverage is more important than ever. All structures are vulnerable to the ravages of flooding. Having flood insurance is a vital precautionary measure.