Commercial Flood Insurance: have you heard of it?
We are experiencing severe climate change and we have long been warning about floods in unprecedented and unexpected places. Even if your business is not located near the sea or rivers and lakes, you still run the risk of having to deal with flood damage.
And as with other property insurance, your building insurance probably doesn’t cover flood damage. You need to purchase this policy separately. Commercial Flood Insurance will protect your company’s headquarters and everything inside.
As with Residential Flood Insurance, you can purchase this insurance via NFIP or from a private insurer, depending on your needs and conditions, of course.
What does Commercial Flood Insurance cover?
Commercial Flood Insurance typically covers repair costs for damage a business suffers from intrusion by flood water. But it is important to know which items are included in the compensation of calculated losses.
Property Coverage (building, office, etc.)
- Electrical and hydraulic systems
- Ovens and water heaters
- Home appliances
- Permanently installed carpets
- Permanently installed cabinets, panels and shelves
- Foundation walls, stairs and anchor systems
- Fuel tanks, well tanks and pumps
- solar equipment
- Content Coverage
Personal possessions such as clothing or furniture
- Portable and window air conditioning
- Carpets not included in the building’s roof, such as carpets installed over wooden floors
- Currency, precious metals and valuable items
What does Commercial Flood Insurance not cover?
When purchasing any insurance, it is important to pay attention to the exclusions, before relying on non-existent protection. In the case of Flood Insurance, it is vital to understand what is considered a flood by the NFIP and what is consequently used by insurers in general.
According to the NFIP, flooding is an excess of water on normally dry land that affects:
- At least two hectares of land
- Two or more properties
If your business is damaged by a sump pump backup (which was not caused by flooding), you will not receive this compensation.
Commercial Flood Insurance does not usually cover:
- Financial losses from business interruption
- Commercial properties outside your building
- Used cars for your business
- important documents
All these exclusions can be covered with specific insurance. Talk to BRZ and discover all the coverage you can take to protect your company and your assets once and for all.
Who needs Commercial Flood Insurance?
As we mentioned above, nowadays it is very difficult to be sure that you will not be hit by a flood. In recent years we have had several examples of storms that have turned into floods in the most unusual places.
- Over 20% of flood claims come from properties outside of Flood Zones
- Wildfires can alter the landscape and ground conditions in your area, so future rains could cause flash floods.
- Storms are not the only cause of flooding. A broken dam or dike, or urban work that alters the flow of water in your area can trigger a flood.
So the safest bet is to purchase your Commercial Flood Insurance. The damage caused by a flood is very high and can break a company. But let’s be practical, you will need Commercial Flood Insurance if:
- Your business is in an area that has cold, snowy winters and hot springs. Fast-melting snow is one of the main causes of commercial flooding.
- Your region has a high incidence of heavy rains.
- If your company is in a Flood Zone
- Your company headquarters are close to large bodies of water
- Floods happen, even if far from your neighborhood, in the city where your company is located.
You know the region where you set up your company better than anyone, if you don’t already, we’ve prepared important questions to ask your neighbors and try to determine your risk. However, the best advice is to be aware of the signs in your region and the mapping of the competent bodies.