Business Insurance: Is Flood Insurance Necessary?
Is Flood Insurance Necessary?
Flood insurance is not necessary for every part of the country. The fact is that certain areas are considered high-risk zones, which indicate a higher than average probability of a flood occurring. If your business operates in one of these areas, it may be beneficial to purchase the extended coverages offered by flood policies. However, this always brings up questions of coverages and comparisons between commercial and flood policies that require some explaining.
1. Commercial Policies
Commercial insurance does not typically cover external flood damage, meaning flooding that occurs because of storms and other surges. These policies will only cover damage done by broken pipes or blockages that are directly related to your property.
2. Flood Policies
Flood coverage is typically offered through the federal government’s National Flood Insurance Program. However, some other companies may provide riders to an existing policy, but these are rare for businesses. Flood coverage will only cover the damage done to the building due to flooding; it will likely not include landscaping, vehicles or business interruptions, these are typically only covered partially under the comprehensive option.
Some businesses will likely be required to have flood insurance, but that is dependent on your zoning and your mortgage lender. Firms in a high-risk flood area are required to have flood coverage, especially when the mortgage is through an insured or federally regulated lender.
Flood coverage will likely cover all damage within your property that was caused by the flood; for example, flooring, walls, plumbing and electrical outlets. However, a flood remediation specialist in the Hamilton, OH area or your insurance provider can offer more assistance and information on possible coverages.
Flood insurance is not necessarily a requirement for your commercial property, but it may still be a wise purchase. While it is often required in high-risk areas, other areas can still flood, and coverage ensures protection.