Courtesy of iii.org
Natural disasters can be devastating to businesses. While damage caused by certain types of natural events – such as lightning or wind – is usually covered by commercial property insurance, you will need special insurance if you want protection against flood damage. This question and answer will help you understand this type of coverage and determine if your business needs it.
Frequently Asked Questions about Flood Insurance
F. Does my commercial property insurance include flood coverage?
A. No. Damage from floods, including floods generated by hurricane-generated storm surges, is usually not covered by a standard policy, including a commercial package policy (CPP) or a business owner policy (BOP). Flood insurance is available from the Federal Government's National Flood Insurance Program (NFIP).
F. What does flood insurance cover?
A. Flood insurance covers damage to your building and contents caused by flooding. This includes losses due to water flowing over rivers or streams, heavy or prolonged rain, storm surge, snowmelt, blocked storm drainage systems, broken dams or lakes or other similar causes. To be considered a flood, the water must cover at least two acres or affect two properties. If water comes from above ̵
F. What is not covered by flood insurance?
A. Properties outside your building are usually not covered. For example, landscaping and septic systems will not be covered. In addition, flood insurance does not cover damage to your commercial vehicles, but this can be included in the optional "comprehensive" part of your commercial vehicle insurance. Financial losses caused by business interruptions or loss of use of insured property are also not covered.
F. Do I have to buy flood insurance?
A. If your commercial property is in a high-risk area and you have a mortgage from a federally regulated or insured lender, you will need to purchase flood insurance.
F. How do I determine my risk of flood damage?
A. Location is the most important factor in weighing your risk of flood damage. Is your business located in or near a flood zone? (Search tools for flood maps are available online.) In which part of the building is your company's equipment and warehouse located? Everything that is on a lower floor, for example, will have a greater risk.
F. Where can I buy flood insurance?
A. Flood insurance is available from NFIP and some private insurance companies. However, NFIP coverage can only be purchased through an insurance staff. you can not buy it directly from the federal government. To find a local insurance staffer who is familiar with the national flood insurance program, contact NFIP at 888-379-9531 for a referral.
F. How long does it take to get flood coverage?
A. There is usually a waiting period of 30 days from the date of purchase before your policy takes effect.
F. Does my flood policy cover mold?
A. Damage from mold and / or mildew as a result of the aftermath of a flood is covered, but each case is evaluated individually. Mold / mildew conditions that existed before a flood event are not covered, and after a flood, the policyholder is responsible for taking reasonable and appropriate mitigation measures to eliminate mold and mildew.
F. How much flood can I get?
A. Commercial flood insurance provides up to $ 500,000 coverage for your building and up to $ 500,000 for its contents.
F. What happens if I need more coverage?
A. You can buy what is called surplus insurance to rebuild properties valued across borders for the National Flood Insurance Program (NFIP). Excessive coverage includes protection against business interruptions.