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Should I Buy Flood Insurance For My Business?

4/9/2020 (Permalink)

Flood insurance form on a table with a book. It’s a smart business decision to purchase flood insurance to protect your property

Typical commercial insurance policies don’t cover flooding. When deciding whether to purchase a separate flood insurance policy for your business in South Hutchinson, KS, there are two questions to consider. The first is, “Am I required to have insurance for flooding?” and the second is, “Would it be a wise decision to get it even if it’s not required?” Let’s take a look at each scenario.

Is a Separate Flood Policy Required?

There are two conditions that must be met before a flood policy is required:

  • A commercial property must be situated in a flood area considered “high risk”.
  • There is a current mortgage on the property through a lender that is federally regulated or insured.

To find out if your property is located in a high-risk flood area, you can search for flood maps on the internet.

If Not Required, Should I Purchase a Flood Policy?

Even if the risk of flooding to your property isn’t high, flooding from heavy rains can occur in any location. It’s a sound business decision to purchase a flood policy.

Where Can I Buy Insurance?

Insurance can be obtained through the National Flood Insurance Program (NFIP), but you will need to go through your local insurance agent to purchase it.

What is Covered?

A flood policy will cover damage repairs to your facility, including the contents if it is caused by a flood. This includes overflow from rivers and other bodies of water, storm surges, heavy rains, and clogged storm drains. The flood water must cover two acres or two separate commercial properties.
Any mold damage caused by the flooding will typically be covered, but the damage needs to be inspected and is determined on a case-by-case basis. If the mold was present before the flood, for example, insurance won’t cover the repairs.
Since flooding can occur anywhere without warning, it’s a smart business decision to purchase flood insurance to protect your property.

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