Floods are a somewhat contentious and confusing part of the property insurance landscape. Homeowners in lowland or coastal regions likely know that flooding is not covered in their homeowner policy. However, if you're a business owner, then you may not know whether your commercial property insurance will handle this particular hazard. Because water damage can prove exceptionally devastating, let's look more at what it means for your premises.
Separate Policies
Commercial property insurance will usually cover water damage to a limited extent. Usually, this includes things like floods from broken pipes, or water that gets in during a storm that damages the roof.
However, it will not cover damage from flooding like river swells storm surge or flash floods. If you would like flood insurance, then you'll need to purchase another policy. You can get your policy courtesy of the Federal government.
How Will Flooding Insurance Protect Businesses?
Water damage can destroy everything from your carpet to your inventory. It can result in smelly mildew at best and deadly mold at worst. Flood insurance might protect you from:
- Broken dams
- Malfunctioning storm drainage
- Melted snow
- Overflowing rivers
- Heavy rain
- Tempestuous storm
- Storm surge
While coverage will often pay for the property damage, it might not cover everything. However, not all property might have coverage. Landscaping, commercial vehicles and septic systems might now have coverage, for example. If your business needs to close down due to the flooding, this policy will not compensate you for the income lost either.
Do I Need Flood Insurance?
Those in particularly high-risk areas likely will need flood insurance. Indeed, some people have a requirement from their lenders to do so. However, even if you own the property outright, you should consider what one bad storm could mean for your livelihood. Given the unpredictability of weather patterns, there's more to protection than what's strictly necessary.
Covering Your Bases
From business owner policies to interruption insurance, commercial property owners should run through a number of scenarios before they make final decisions about what coverage their business needs. Flood insurance is only one way to keep your income stable even while you're dealing with a devastating event. It can work alongside a lot of other policies.
Commercial property insurance on its own can be a somewhat flimsy policy when it comes to water damage. It may not cover a number of scenarios, a fact that not every business owner realizes until it's too late. Unless you've taken a fine-toothed comb to the coverage, you may want to discuss what kinds of events will and won't have coverage.