The recent series of floods is an unfortunate lesson for many homeowners and small business owners in this country. Nearly 40 percent of small businesses never reopen following a flood because of the thousands of dollars of damage caused by just a few inches of flood water, reports the Federal Emergency Management Agency (FEMA). According to FEMA, flood insurance is the best protection from a devastating financial loss due to a flood.
Commercial flood protection insurance is a type of business insurance that offers protection for your small business against flood water damage. Commercial flood protection insurance is purchased as a separate business insurance policy, or alternatively, as a flood endorsement. The National Flood Insurance Program set up by the federal government and managed by FEMA and the Department of Homeland Security provides information about flood insurance for your business through its website.
Commercial flood protection insurance isn’t just for small businesses that have waterfront properties. Rather, any business that is located in a flood-prone area, including a low-risk flood prone area, needs flood insurance. Even if your business is far away from a local creek or river, flooding can occur from heavy rain or snow and ice melting. Even clogged storm drains may be a culprit of a flood. Flooding can occur in every state and at any time during the year. It important to note that about 25 percent of all floods in the United States occur in areas of low to moderate flood risk.
Not only does commercial flood insurance pay for damage to your building as a result of a flood, but also damage to your equipment, machinery, fixtures, electrical and plumbing systems, and certain personal contents as well. In addition, cleanup costs, such as expenses incurred for removing flood debris and cleaning the building are also reimbursed as part of a commercial flood insurance protection policy.
Keep in mind, that most commercial flood insurance protection polices provides coverage even before a flood. For example, sandbagging and other expenses occurred to protect your business property from a flood threat is typically covered.
As a small business owner, protecting your building and contents from the potentially disastrous effects of a flood is a matter of survival.