Should Your Business Have a National Flood Insurance Program Policy?
Having insurance is a key part of managing risks for a business. However, most commercial insurance policies do not include flood and flood-related damage – something many entrepreneurs learn the hard way. Lenders may insist on a National Flood Insurance Program (NFIP) policy, but most businesses don’t have one. Normally, flood insurance in Secor Gardens, NY, must be purchased separately, and the financial assistance offered by FEMA to homeowners is not offered to businesses without a flood policy. Here is some information to help you decide if you need this additional insurance.
What Does NFIP Cover?
First, there are three things you should know about NFIP’s standard commercial insurance covering floods:
- It’s a stand-alone policy that only covers flood damage (as defined below).
- It pays for direct physical damage, up to the limits of the policy, not to exceed actual cash value.
- Personal property coverage is not included with building coverage.
Both building and personal property coverage, which must be purchased separately, are each up to $500,000, depending on your policy limits and deductibles.
What Is a Flood?
The NFIP defines a flood as “a general and temporary condition of partial or complete inundation of two or more acres (or properties) of normally dry land.” This could be from virtually any source and includes mudflow, collapse or subsidence of land if caused by water “exceeding anticipated cyclical levels.” In other words, if there’s a lot of water above and beyond what’s normally expected, it’s probably a flood to the NFIP.
Should You Get a Policy?
Can your business afford a $90,000 loss in Secor Gardens, NY? That’s the average commercial flood claim, and this damage is not covered under non-NFIP commercial insurance policies. If you are in or close to a hazard zone, you should strongly consider purchasing a policy. Flooding and storm water cleanup are best left to professional companies. While they usually have reasonable rates, having your damage and personal property covered in advance can help diffuse costs.