Spring is Here, is Your Flood Insurance Ready?

Flood insurance for businesses and commercial property, whether you own or rent your space, is just as important as it is for private homeowners……and in some cases even more important because the potential financial losses incurred in a workplace flood loss can easily be more than any private homeowner might experience because of the value of the products and equipment that your commercial location may have. A commercial kitchen is thousands of dollars more expensive than the average person’s home kitchen, and that is just the value of the appliances.

Unfortunately, Flood coverage is frequently overlooked when purchasing a business owners policy because like private residence Flood policies, the commercial flood policy must be purchased separately, and not all insurance agents are licensed to sell flood insurance, so it’s not always top of the mind when a business owner is shopping for insurance.

The exposure faced by businesses are the same as for the residences in the surrounding area from the standpoint of how they are mapped and rated by FEMA, however some businesses have a much higher opportunity for loss depending on their physical circumstances. For instance, a house is surrounded by mostly grass and trees that help to soak up at least some of the water that is coming down. Businesses tend to be surrounded by concrete and this can cause a flood situation to occur much faster and to rise much higher than it would in a residence.

Flood insurance covers losses to building and personal property caused by excess or overflowing water from a natural source, as well as mudflow losses. These are things that are not covered by your standard business owners policy, just like flood is not covered by the homeowners policy.

Like all flood insurance, it is written by whatever company you purchase it through, but underwritten by the federal government and administered by National Flood Insurance Program, which is a division of FEMA.

Costs vary from $400-$500 a year in low to medium risk locations, all the way to several thousand dollars a year for those businesses or commercial properties that are located in a zone that is medium to high risk. The amount of coverage for building and/or business property can be adjusted, as can your deductibles in many cases, to help manage the balance between being insured to value and managing annual costs. Those businesses who are leasing their space have the option of a policy that only covers business property and not the physical property.

Flood insurance is a vital piece of your asset protection plan, and can be absolutely key in saving your livelihood when the rain starts to to fall.


This post was written by Aaron Nicklay, Agent with Farmer’s Insurance. For more information on this topic and more and how Aaron can help protect you or your business, email him at anicklay@farmersagent.com or call (952) 229-5155.

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