Think Flood Insurance Has You Covered?

Because NFIP policies provide only baseline protection, you might want to expand your coverage.

The federal government offers a commercial flood insurance policy that provides up to $500,000 in building property coverage and up to $500,000 in business personal property (or contents) coverage. The definition of flood is pretty expansive: It includes the overflow of inland or tidal waters, the unusual and rapid accumulation or runoff of surface waters from any source, mudflow (which is a river of liquid, flowing mud), and some circumstances of collapse or subsidence of land due to waves or currents resulting from a flood.

But the federal commercial flood insurance policy doesn’t cover water-related losses for all parts of some structures, and its coverage limits are pretty low if you are a midsize or large business.

You have to purchase building property and business personal property coverage separately; contents are not covered if you buy just building property insurance. Additionally, business interruption losses and the destruction of outdoor structures or valuable papers, script or data are not covered.

Private flood insurance is a growing market. Private insurance may be available for your business in Michigan since some insurers have expanded their policies’ reach to our state, but they may restrict eligibility to those who are in communities that participate in the floodplain management plan set forth by the Federal Emergency Management Agency. Eligibility may also be limited based on a business’s building and contents value — some insurers restrict values to under $2.5 million in each coverage (building and contents). For those outside a FEMA/NFIP floodplain management community, there are still private insurance options, so talk to your Trusted Choice^® Independent Insurance Agent about the various options — both within the federal government’s program and outside it.

Remember that sewer backup not caused by flooding is not covered under a flood policy. You have to obtain that through a commercial property policy. Your Trusted Choice^® Independent Insurance Agent can advice you on how to add that if it isn’t already in your commercial property insurance coverage.