Flood Insurance: Do I Need It?
Protect Yourself And Livelihood With Flood Insurance Coverage
Business owners in East-West Vincent, PA, face many risks in the commercial marketplace: capitalization, economic downturns, competition and even operational threats, like extreme weather, can all lead to financial failure. Some weather events — damaging winds and lightning, for example — generally are covered by commercial insurance. A standard business owner's policy will provide for heavy rain, cascading gutters and melting snow that leak (from above) into your commercial space. However, flooding (even storm-generated flooding) requires flood insurance.
Here's a rundown of need-to-know facts about this niche sector of business insurance:
Coverage: Insurance underwrites losses from flood damage to your building and property. As defined, a "flood" is water that affects at least two acres or two properties.
Exemptions: Insurance doesn't cover the exterior of your property. Septic systems, landscaping and business vehicles are exempt. Further, it doesn't apply to losses resulting from business interruption (closure) due to water damage.
Location: Geographical location is the key factor that determines your business' risk for flood damage. Check online flood maps or contact your local government to find out if you are in a flood zone.
Stipulation: You're required to purchase insurance if your business is located in a high-risk flood zone and you hold a mortgage from a federally-regulated or insured lender.
Vendor: You can obtain a policy through the federal government's National Flood Insurance Program. However, you must purchase it through a professional insurance agent; you can't buy a policy directly from the government.
Amount: An insurance policy guarantees up to $500,000 in coverage for your building and $500,000 for its contents. You can buy additional coverage to repair and restore your damaged property that includes business interruption provisions.
Post-flood property damage: Mold damage (resulting from a flood) is covered; however, each claim is evaluated individually.
Whether floodwaters come from raging rivers or overflowing levees, torrential rains, a ruptured dam or storm surge, they can be devastating for affected businesses. Savvy business owners know their flood risk and recognize the importance of protecting themselves and their livelihood with flood insurance coverage.