Natural disasters can be devastating to business. Your commercial property insurance generally covers natural events such as lightning or wind, but flood protection requires a special policy. So what constitutes an actual flood? First, it’s important to understand the general guideline that if water comes “from above” (i.e. from rain or melting snow overflowing gutters and leaking onto your inventory), you may be covered by your standard commercial property insurance.
Flood insurance is different. It generally includes losses resulting from water overflowing rivers or streams, heavy or prolonged rain, storm surge, snow melt, blocked storm drainage systems, broken dams or levees, or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties. However, flood insurance has its limits. Property outside your building (like landscaping and sewer systems, for example) generally will not be covered by your flood insurance. Keep in mind, too, that flood insurance will not cover damage to your business vehicles; however, this can be included in the optional “comprehensive” portion of your business vehicle insurance. Financial losses caused by business interruption or loss of use of insured property are also not covered by flood insurance.
The most important factor here is location. Is your business located in or near a flood zone? In what part of the building is your businesses equipment and inventory located? Anything housed on a lower floor, for instance, will be at greater risk. We can help you determine your flood risk, and then discuss with you how to obtain appropriate coverage for events related to flooding and its aftermath.