Most but not all commerical property insurance policies exclude flood
Floodwaters have the power to damage not only building, but disrupt your business. The time it takes to re-stock your inventory could cause your business to fail. How can you protect your business against losses by flooding?
Option 1: Hope that you’ll receive Federal disaster relief if a flood hits.
Many businesses wrongly believe that the U.S. government will take care of all their financial needs if they suffer damage due to flooding. The truth is that Federal disaster assistance is only available if the President formally declares a disaster. Even if you do get disaster assistance, it’s often a loan you have to repay, with interest. Commercial business are also last on the list of priorities behind individuals and municipal entities.
The bottom line is that if you’re looking for secure protection from financial loss due to flood damage, Federal disaster assistance is not the answer.
Option 2: Switch to a policy that includes flood as a peril.
This option is only avaialble to property owners that have significant values. Ususally a total insuranceb;le value of $50,000,000 is necessary to be eligible for one of the many insurance products that include flood as a peril. Even then, a sublimit is usually place on the policy of $5,000,000 to $10,000,000 if there is any exposure to a flood prone area, i.e. within the 500 year flood plain.
Option 3: Buy flood insurance and stay protected no matter what.
The National Flood Insurance Program offers flood insurance to commerical properties the same as it does homeowners. The maximum limit, except in special circumstances, is the same $500,000. The NFIP also does not cover the loss of income.
In general, a policy does not take effect until 30 days after you purchase flood insurance. So, if the weather forecast announces a flood alert for your area and you go to purchase coverage, it’s already too late. You will not be insured if you buy a policy a few days before a flood.
Option 4: Buy Flood Insurance from a private insurer.
There are policies that are issued by private insurers that are not part of the NFIP. These policies have higher limits available and in some circumstance lower premiums.