Just like personal insurance, flood insurance for businesses is often overlooked, deemed unnecessary by insureds, or thought that it is included in their commercial property insurance package. Hello, I’m Chip Fridrich and let’s jump into commercial flood insurance basics today as we attempt to “understand insurance and risk”.

There is no coverage for the peril of flood in commercial insurance unless it is added on a separate policy or is added as a special endorsement as a part of your current program. Flood can be interpreted as many things – overflow of water, spray of water, and mud flow just to name of few. Regardless, they all involve the key ingredient – water. Maximum limits for flood policies are five hundred thousand dollars for business property (or structures) and five hundred thousand dollars for business contents which could include office furnishings, equipment, or inventory.

An exception the half a million dollar limit for commercial insurance would be policies for condominiums, row homes, or townhouses. The residential condo building association policy was established to protect these risks at higher limits and allows for better pricing, one deductible, and one policy for an entire complex or association. This prevents the hassle of requiring these owners to obtain flood policies individually. You see a lot of these type policies in coastal areas where there are numerous in high flood zones. Coverage amounts are limited to two hundred and fifty thousand dollars per unit or the replacement cost of the building whatever is less.

Speaking of flood zones, they apply just like the residential ones and these zones determine the rate along with other characteristics like the building’s elevation and replacement value. These zones can change over time so if you are a business owner and you have been in one location for a long time, you may want to check to see if you are now in a flood zone. 38% on all flood incidents happen in non active flood zones so it makes sense to evaluate your risk temperament when it comes to flood coverage. many businesses are worth millions. And when you include the value of tangible items like buildings, equipment, and inventory that could be lost in a flood it is worth a look.

An added quick note, excess flood coverage can be purchased to serve as an added layer of protection if your needs are in excess of a half a million dollars. In many cases an additional amount is needed to bolster the base coverage to insure your risk completely.

If you would like to discuss your commercial insurance needs, contact our agency and we can sit down with you to map out a plan for not just your commercial flood options, but your entire insurance program.

Check out our web site at fpa.insure or contact us at info@fpa.insure for more information on how we can be of service to you.