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Examining the Details of Business Flood Insurance

In the same way that your home and possessions are at risk of damage during a flood, your business, the building and all of its contents therein are also at risk when a water disaster strikes. The monetary losses in a business situation can be significantly more disastrous when you consider replacement value combined with down time, which often equals lost revenue. Those factors make business flood insurance a vital element to any commercial insurance plan.

Business Flood InsuranceTaking a Close Look at your Current Coverage
You may be assuming that the assets, inventory and equipment of your business are covered under your commercial insurance policy, in the event of a flood. However, this is not necessarily the case. Most commercial policies state that damage caused by acts of nature is not covered. In fact, the fine print in your policy most likely reads:

“Exclusions: water damage, including those caused by or resulting from
i) floods, surface water, waves or tides
ii) back ups from sewers, drains, sump pumps, wells or other systems designed to avert subsurface water
iii) swells of groundwater.”

If this clause appears in your commercial insurance policy, your business would be responsible to recover any losses incurred by water. This type of financial setback can undoubtedly affect the company’s profits and has the potential to bring a business to its knees, given the cost of clean up, replacement and additional protection if necessary.

Adding Business Flood Insurance Coverage

Finding an insurance company to cover your commerce and its contents in the event of a flood may not be an easy task. For instance, some insurers will not add flood coverage to a policy in areas where coastal storms are frequent, although such areas surely need coverage the most.

If you rent facilities for your business operations, do not assume that the landlord has business flood insurance for the building. Find out the terms of the landlord’s policy and then talk to your agent about whether you need additional coverage for contents, inventory and equipment.

The United States government introduced FEMA to help homeowners and business owners obtain coverage for flood damages despite the perceived level of risk and at a more reliable rate. Contacting them would be a good first step towards protecting your business.

Finding the Best Business Flood Insurance Coverage
Your business is unique and so should be your insurance coverage. Arm yourself with a list of inventory (current or average) i.e. tools, vehicles, office furnishings and equipment. The lists should include an assigned value for each item. Contact your insurance agent to find out which type of business flood insurance coverage is available to you.

The purchase of additional business flood insurance is worth the investment - procrastination is not a good plan. Insurance policies, including additions, typically have a waiting period before becoming active, so your business will continue to be vulnerable during that time.

The cost of flood insurance is a business expense that spans over many years with continued coverage, It is an important and worthwhile investment that will give you peace of mind when a storm is brewing and allows you to get back to what you do best – running a successful business.


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