In our last post, we discussed the need for commercial flood insurance. In the wake of back-to-back hurricanes this year and with flood risks year-round nationwide, business owners need to be proactive about protecting their bottom line with an extensive Flood Insurance policy. In this article, we’ll explore the common myths surround this insurance and how business owners can adequately protect their operations.
Myth #1: Businesses in flood plains only have to buy this insurance.
This is incorrect and a widely believed myth. In fact, if a business is located in a flood plain, it simply means that they would be required to purchase a policy. Even ones that are not located in high risk areas can still obtain a flood policy. Remember, standard general liability insurance does not extend coverage to flooding.
Myth #2: Only high-risk areas need flood insurance.
Going hand in hand with the above-mentioned point, there is no way to predict the weather. Just because the business is not located in a place that’s considered high-risk does not mean they shouldn’t protect themselves anyway. Otherwise, they run the risk of being on the hook for all the necessary repairs.
Myth #3 All water damage is the same.
Commercial property insurance would cover a loss if it was a result of rain, but not if the street flooded and the entire business was underwater. Water damage varies and coverage only covers certain named perils.
Myth #4: Flood maps never change.
This is false. Flood maps can evolve over time, putting the business at risk. Bankrate suggests keeping an eye on flood maps through the following resources:
- FloodSmart.gov: This site will allow you to put in your address and see if it’s in a flood plain, and give you information on risks, premiums and agents. But use it as one tool, not the final word on whether your home is in a flood plain.
- Insurance agent: When it comes to researching whether the business is in a flood plain, you definitely want someone knowledgeable to research the question for you. And, you might want to get a second opinion from a different agent.
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