Evaluating the Need for Commercial Flood Insurance

The recent back-to-back hurricanes followed by the outbreak of wildfires in California have left business owners nationwide wondering how they would recover if they experienced a natural disaster, as well. While not every peril and storm can be predicted, protecting the business ahead of time with a Flood Insurance package is a realistic and feasible option to protect the bottom line. In this article, we’ll explore the need for this policy and how it can benefit business owners in times of loss.

It’s important to note that Commercial General Liability insurance does not extend coverage to floods caused by natural disasters. A flood insurance policy must be purchased separately and in conjunction with a Commercial Property Policy (CPP) or Business Owners Policy (BOP).

Flood insurance covers damage to your building and contents caused by flood. This includes losses resulting from water overflowing rivers or streams, heavy or prolonged rain, storm surge, snow melt, blocked storm drainage systems, broken dams or levees, or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties. Generally if water comes from above—for instance from rain or melting snow overflowing gutters and leaking onto your inventory—you’ll be covered by your standard commercial property insurance, explains the Insurance Information Institute.

What’s more, damage from mold and/or mildew resulting from the after-effects of a flood is covered, but each case is evaluated on an individual basis. Mold/mildew conditions that existed prior to a flooding event are not covered, and after a flood, the policyholder is responsible for taking reasonable and appropriate mitigation actions to eliminate mold and mildew.

On the other hand, however, the items that are not covered by this insurance are as follows:

  • Owned property outside of the commercial building, such as equipment or vehicles.
  • Outside plumbing and septic systems.
  • Loss of money due to business interruption.

The next important consideration to make is determining the flood risk. Flood zones can be found here and determines whether the business is required to carry flood insurance or not.

About Genesee General

At Genesee General, we strive to provide quality insurance solutions. Our longstanding expertise has allowed us to successfully serve your clients for over three decades. For more information about our products, we invite you to contact us today at (800) 282 – 8755.