Does My Business Need Commercial Flood Insurance?

6/14/2021 (Permalink)

Stormwater inside a commercial building in Lynnville, TN.

When business owners purchase a commercial insurance policy for their property in Lynnville, TN, they sometimes think they are covered in the event of a flood. However, most policies do not include flood insurance, and they must purchase coverage separately.

Am I Required To Purchase Flood Coverage?

Two factors determine whether you need coverage for floods. First, if your commercial property is in an area that is high-risk and prone to floods, and second, if you are paying a mortgage from a federally insured or regulated lender, you will need to have a commercial insurance policy for floods.

What Does Flood Coverage Include?
An insurance policy for flooding covers flood damage repair to your property and its contents in the event of a flood. It includes losses from:

• Prolonged or heavy rain
  
• Overflowing bodies of water such as streams or rivers
  
• Blocked storm drains
  
• Storm surge
  
• Melting snow
  
  

Water covering at least two acres or affects a minimum of two properties is defined as a flood for coverage purposes.

What Does Flood Coverage Exclude?
The property outside of your building, such as landscaping and septic systems, is not covered by insurance for flooding. Your vehicles are not covered by a flood policy, although you can purchase coverage in your business vehicle policy's comprehensive section.
Business interruption insurance is also a different type of coverage not included in a flood policy, as is the loss of use of an insured property.

How Can I Obtain Flood Coverage?
The National Flood Insurance Program, a program managed by FEMA, offers insurance for flooding through a network of insurance professionals and NFIP Direct. Your policy goes into effect after a 30-day waiting period, so it's essential to plan for coverage.
While flood insurance involves a separate policy, you can purchase it for your Lynnville, TN, property to ensure you are prepared if your property experiences a flood.