Understand your insurance choices prior to the need for it

8/27/2021 (Permalink)

Like any natural disaster, a flood can become very problematic as a disruption to business operations. It’s imperative that it is handled efficiently, so business can continue as soon as possible. While considering the best process, you likely think of commercial insurance for floods. To know if commercial flood insurance is worth the cost for your business, you must first understand its scope.

Flood insurance may or may not cover water damage that was nonexistent before the flood event. There are several flood events where losses are usually covered depending on your policy such as:

• Overflowing bodies of water
• Excessive or extended rainfall
• Storm draining blockage
• Broken dam
• Broken levees
• Storm surge
• Melting snow

If the damage is due to a burst pipe or precipitation overfilling gutters, the flood policy may not be necessary.  Those events often are covered by regular commercial insurance if negligence cannot be determined.

Is Flood Coverage Standard in Business Insurance?

Flood damage is not traditionally rolled into a baseline package. The federal government offers coverage through the Nation Flood Insurance Program, known by its abbreviation of NFIP. NFIP is offered by FEMA alongside private options in the market.

There is a caveat to the necessity of flood insurance. Any business mortgaged by a federal lender in an area with a major flood risk is mandated to buy flood insurance. Outside of flood prone areas, it is not required.

How Do I Remedy Flood Damage Once Insurance Takes Effect?

A local commercial storm recovery company will send out experts to evaluate and create a plan to repair the damage. If you have flood insurance, the policy provider will work with connected partners to fix up your business from the storm damage.

Even if you don’t have an appropriate commercial insurance policy, you can contact a restoration company for estimates of repair costs. Depending on the area, it may be more economical to keep a flood policy rather than wait for a costly disaster to hit your business. Checking the flood risk and prices in the area gives you a cost-benefit analysis to determine if it’s appropriate for your business.

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