Without warning, a flood can eviscerate business inventory, buildings, and equipment. Most business policies neglect flood coverage, and because of that, when a flood strikes, one out of four businesses will shut their doors and never open again. In fact, 90 percent of natural disasters make up floods. Whether you own a small business with a couple of employees or a large business with several hundred employees, commercial flood insurance protects both the inside and outside of the business perimeter.

flood water on the streets of a city

What Is Commercial Flood Insurance?

This form of flood insurance will cover your machinery, merchandise, inventory and contents for up to $500,000. Along with content coverage, the commercial buildings will receive coverage of up to $500,000. Even when you don’t own the building itself, you can insure the improvements made to the building.

The odds might sound stacked in your favor that you will never suffer a major flood, but this type of natural disaster occurs more often than you might think. Even minor floods become a source of crushing financial losses. Floodwater that invades your business, for example, can ruin carpets, floors and damage the walls. It can also destroy appliances and merchandise that leads to paying thousands of dollars for the replacement process.

Who Uses Commercial Flood Insurance?

Anyone who owns a business and wants to defend their assets can benefit from commercial flood insurance. In the event of a serious disaster, you have total protection. In particular, entrepreneurs who own a business in the three major flood zone categories can shield their business from harm. First, you have A Zones, which exist near lakes, rivers, and streams. It makes them the second highest risk zone, and on average, you can expect to pay an annual $557.

Second, you have a V Zone located close to the ocean. Because the business was established close to the ocean, it opens them up to storm surges and hurricane flooding. Business owners in the V Zone can benefit, especially because they represent the highest risk, and commercial flood insurance premiums can cost as much as $1,000 annually. Finally, you have A99, C, B and X Zones where the business experiences less flooding. In these cases, you can pay as little as $119 annually.

How to Get Commercial Flood Insurance

Getting this type of insurance comes down to talking with a licensed and experienced agent. You should ask them multiple questions to decide if they can provide you with the right level of coverage. When it comes to commercial flood insurance, you don’t want to over-insure, but at the same time, you don’t want to under insure either. Many agents have not found this balance and finding the right agent will be the best way to find out.

Always be cautious with business policies because you have a mandatory 30-day waiting period with a new flood insurance policy. That means time becomes essential. An experienced agent will work with you to understand your goals and requirements. With some agents, their sole purpose is to sell you coverage. This careless attitude becomes harmful to the business owner when they have to file a claim, and the company does not stand behind them.

Excellent insurance agents create a pre-storm preparation to help you in the event of a disaster. A great insurance agent exhibits a magnetic personality that draws people in. She puts the customer first. Honesty will sit in the driver’s seat and take top priority.

6 Tips for Commercial Flood Insurance

flood water on a street with a street sign

Tip #1: Call Immediately

Whenever a flood invades the sanctity of your business, you should not wait to file a claim. The longer you wait, the harder filing a claim will be because evidence starts to fade after the flood. You should also know the commercial flood insurance agent you need to speak with.

Tip #2: No Flood Insurance? No Problem

Sometimes you might not have this particular form of coverage. However, you might still be able to file a claim with your commercial insurance company or your business insurance policy. Never give up.

Tip #3: Provide Proof

In case a major federal disaster happens, you may have to show proof of the rejection of your flood-related claim to your property insurance company. This determines your federal aid eligibility.

Tip #4: Understand Vehicles

Damage to commercial vehicles becomes an iffy area surrounding commercial flood insurance. Even if you parked the car in the garage, your commercial property policy might still neglect coverage. To get this coverage, you generally need the provision that includes the automobile policy.

Tip #5: Take Detailed Inventory

Whenever possible, snap pictures or turn on the video camera. This hands you proof of what the property looked like after the flood hit. Also, save the receipts you have of the major items. As an additional precaution store this information off the premises.

Tip #6: Know Your Policy

You cannot underestimate the value of understanding what your insurance policy covers and what it does not cover. Look at the risk of what it doesn’t cover to decide if you will need to buy more coverage. In most cases, insurance claims will resolve quickly, but there have been cases where an investigation takes place. Understanding your policy, you know what dictates the proper coverage before a disaster or accident happens.

Drawing to a Close

Depending on where you live, your business may find commercial flood insurance useful. In many cases, it keeps you protected from the dangers of a flood that wipes out everything. You might think your basic policy covers this, but most normal insurance policies do not cover this. You should acquaint yourself with your individual policy to decide if you need further help. Have you ever had to file a claim for flood insurance? What was your experience and did you learn anything in the process. The best policy works in the background but defends you when you need it the most.

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