Flood Insurance Is a Good Idea Even When It Is Optional
Commercial Insurance Policies
Commercial insurance policies cover damage caused by water falling from the sky, flowing from plumbing or caused by fire suppression. Floodwater damage requires a separate flood insurance policy. This policy covers damage from:
- Storm surge like that which accompanies hurricanes
- Overflow from swollen river and streams
- Runoff from heavy rains or snow melt
- Blocked drains and sewers
- Failed dams and levees
Sometimes Flood Insurance Is Mandatory
If water overflows riverbanks and sweeps your business away, commercial insurance won’t pay for the loss. The company might then have no choice but to file for bankruptcy. Bankruptcies cost businesses money. When those businesses are banks, the federal government gets involved.
Special rules apply to businesses in areas with a high risk of flooding. If they want a mortgage from a federally regulated or federally insured financial institution, they must have flood insurance. In the event of a flooding disaster, the government wants to make sure that the business can repay the debt.
Even when flood insurance is optional, it is still something worth considering. Your insurance agent can help you understand the real risks your business faces. If you want your business to survive a flood, flood insurance is a good investment.
Commercial Flood Insurance Is Available From FEMA
The Federal Emergency Management Agency (FEMA) offers flood insurance through its National Flood Insurance Program (NFIP). The flood policy only covers damage to the building and its contents.
NFIP insurance does not cover anything outside the building. The list of items not covered includes vehicles, outdoor equipment, landscaping, paving and septic systems. This policy also does not cover the costs associated with business interruption.
Cleanup After a Flood Can Be a Humbling Experience
A commercial insurance cleanup usually deals with water damage from clean-water sources. Floodwater is a bigger problem. It contains sewage and toxic chemicals. If you are facing flood or any other water damage cleanup in the Warwick, RI, area, know that water damage mitigation experts are close by. They are ready to take on your most difficult cleanup tasks.