While you may be required to obtain flood insurance if your business is in a FEMA-designated flood hazard zone, a voluntarily purchase is just as important in order to save you from heavy financial burden should a flood put stress on the building or property. It is important to understand this type of coverage and determine your business’s need for it. Natural disasters can be devastating to businesses. While the damage caused by natural events are typically covered by commercial property insurance, a special policy is needed for flood damage protection.
While predictions are made where flooding might occur, the methods can become quickly outdated and may not reflect the current risk. It’s impossible to determine exact future weather conditions and climates. It is very common for floods to occur beyond designated special flood hazard areas. Any communities with growing development will find runoff expanding, leaving the water with only one place to go. This pavement principle can especially increase flooding in fast-growing cities.
According to FEMA, floods are the most common and costly natural disaster in America. It’s estimated that recovering from just an inch of water inside your building can cost roughly $27,000. Flood insurance provides businesses with the protection needed to not be left covering those renovation costs entirely on their own.
Better to be Safe than Sorry
Flood damage, including flooding resulting from hurricane-generated storm surge, generally is not covered under a standard commercial policy. Flood insurance is the only coverage that properly protects businesses from the damage to the building and its contents caused by a flood. This includes losses resulting from water overflowing rivers or streams, heavy or prolonged rain, storm surge, melting snow, blocked storm drainage systems, broken dams or levees, or other similar cases.
Keep in mind that for a water surge to be considered a true flood, the water must cover at least two acres or affect two properties. Generally, if water comes from above—for instance from rain or melting ice overflowing gutters and leaking onto your inventory—a standard commercial property insurance should cover that.
Do not let water damage risk the integrity of your business. In what part of the building is your business’s equipment, inventory and important documents located? Anything kept on a lower floor, will be at greater risk. Speak with an insurance agent to figure out how much coverage your business calls for.
About The Rubin Group
Based in New York, The Rubin Group provides insurance in most of the 50 states. Our full-service insurance brokerage provides insurance and risk management services to individuals in all income brackets and businesses of all sizes and types. We understand that every client has unique coverage requirements, and we are passionate about providing the ideal individualized coverage for each customer. Each member of our team takes the time to truly understand your situation, the particular risks you anticipate – and the very real risks you’ve not yet contemplated. For all of your insurance needs, contact us at The Rubin Group!