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FAQs about Commercial Flood Coverage.

Commercial flood insurance is slightly different than traditional flood insurance. Commercial flood insurance protects your business from the financial burden of flood damage. Just like your homeowner’s policy will not protect you from floods, your property insurance also will not. Therefore, you must take the extra step of protecting your business and purchase commercial flood insurance.

We know insurance can be confusing, so here is a list of the most common questions about commercial flood insurance.

  1. Does my business really need it?

Answer: Floods can happen anywhere at any time. Even locations that are not in a high-risk area still have the potential to flood. The average claim for the flooding of a business is just short of $100,000. If you don’t have that money available, you could face detrimental consequences. It is always better to be safe than sorry.

  1. What will flood insurance cover?

Answer: The two coverages for flood insurance are for the building structure itself and the contents inside. For the building, damage to items such as the walls, ceiling, flooring, and other fixtures are covered. For the contents, things like furniture or inventory can be covered. You can also purchase additional policies such as increased cost of compliance, clean-up, or mold.

  1. What is not covered by commercial flood insurance?

Answer: Like every insurance policy, there are some limitations. Anything outside of your building will not be covered. This includes things such as any landscaping. Also, any business vehicles will not be protected. This must be covered under a commercial auto policy.

  1. How long does it take until my business is covered?

Answer: Flood insurance will usually go into effect around 30 days of purchasing. Therefore, it is essential to plan ahead.

  1. Is it required in my area?

Answer: Commercial flood insurance is only mandatory for federal associated businesses in a high- risk area. However, we strongly recommend that any company purchases it, especially if you live in a high-risk area.

  1. What is the coverage limit for businesses?

Answer: For both the building structure and contents, $500,000 is the limit for flood insurance under NFP. If you need additional limits, you can purchase extra flood coverage.

  1. What factors will affect the cost of commercial flood insurance?

Answer: Certain factors will help determine how much commercial flood insurance will cost your business. These include how old your building is, the height, occupancy, location, and your deductible.

  1. What is categorized as a flood?

Answer: NFIP defines a flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties.

Floods can be explained in four ways:

  • Rapid accumulation or unexpected runoff from a nearby water source
  • Mudflow
  • The collapse of land along a body of water
  • Overflow of inland or tide waters

We hope we were able to answer some of your commercial flood insurance questions. If not, feel free to contact us here or give us a call at (410)-742-5111.


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