Do I Need Commercial Flood Insurance?

6/1/2022 (Permalink)

Depending on your location and risk factors, you may want to invest in a flood policy.

Do I Need Flood Insurance for My Business?

Your business is your livelihood, and you want to be certain that you have all the right insurance in place to protect that livelihood if something goes wrong. Most likely, you’ve purchased at least one commercial insurance policy, such as commercial property insurance, commercial liability insurance, or business interruption insurance. What about flood insurance? Depending on your location and risk factors, you may want to invest in a flood policy.

Is Flood Coverage Required For My Business?

To determine whether your business is required to have a flood policy in addition to your commercial property insurance, ask yourself these three questions:

• Is there a mortgage on the property?
  
• Is that mortgage with an FDIC-insured lender?
  
• Is the business property located in a high-risk FEMA flood zone? (You can check your flood zone designation on the FEMA website.)

If you answered “yes” to all three questions, then flood coverage is likely mandatory for your business property. Of course, even if you’re not required to maintain flood insurance, a flood policy may still be a wise decision.

What Counts As a Flood?

Commercial property insurance specifically excludes coverage for “flood” events. A flood, in the insurance world, means water that comes from sources such as:

• overflowing lakes or rivers
  
• snowmelt
  
• broken levees
  
• storm surges
  
• heavy rain
  
• failed dams

In addition to coming from an eligible source, the water must also either cover two acres or more of land or affect two or more properties.

What Does a Flood Policy Cover?

Coverage varies somewhat from policy to policy, but generally, flood policies cover damage to your business property, equipment, and inventory when the damage is caused by an eligible flood event. Most policies will also cover the cost of professional mold remediation if you act quickly enough after the flooding.

If your Lighthouse Point, FL, business is in a flood zone, flood plain, or at risk of flooding, or even just as a protective measure, flood insurance may be a smart choice to protect your assets.