Commercial Flood Insurance Policy Information

Commercial Flood Insurance. Your business is one of your most prized possessions. You invest your time, money, blood, sweat and tears that you put into it. Because of this, you should take all the necessary measures to ensure that your business is covered against loss from the different types of risks. Getting a commercial property insurance is a great start. However, did you know that commercial property insurance does not cover damage from a flood?
commercial flood insurance. Given that floods are naturally occurring and more often than not come without notice, it is essential to have business flood insurance for your commercial property depending on its location. As you look into the insurance provider options that you have, some of the vital information that you should know includes:
For flood insurance definitions, see: Insurance Flood Terms Glossary.
Does your business need commercial flood insurance? Commercial property insurance does not include flood coverage, so if your business located in or near a flood zone you should strongly consider it.
Below are some answers to commonly asked business flood insurance questions:
- What Is Commercial Flood Insurance?
- How Much Does Commercial Flood Insurance Cost?
- Who Provides Commercial Flood Insurance?
- What Is Covered By Commercial Flood Insurance?
- What Isn't Covered By Commercial Flood Insurance?
- Who Should Consider Buying Commercial Flood Insurance?
- What Do NFIP Acronyms Mean?
- What Does Commercial Flood Insurance Cover & Pay For?
What Is Commercial Flood Insurance?
Commercial flood insurance is a type of insurance policy designed specifically to protect businesses and commercial properties from financial losses due to flood damage. This type of insurance provides coverage for damage to a commercial building, its contents, and any equipment or machinery within the building.
Commercial flood insurance policies typically include coverage for direct physical losses caused by floods, including water damage, as well as loss of business income and additional expenses incurred during the recovery process.
This type of insurance is typically purchased by business owners who operate in areas that are prone to flooding or are considered to have a high risk of flooding.
How Much Does Commercial Flood Insurance Cost?
The average price of a standard Commercial Flood Insurance Insurance policy for small businesses ranges from $67 to $99 per month based on location, flood zone, square footage, construction type and more.
Flood insurance premiums are determined by the chances of your business being flooded and how much flood damage can be done - up to the policy limits. The biggest factor in the premium is what flood zone your business is in, followed by how much you want to insure. Flood insurance pricing is complex and you need to speak with an agent to get an accurate quote.
The actual amount that will be covered depends on the value of the property and the extent of the loss. Those who are in low-risk flood areas end up paying lower premiums for commercial flood insurance, while those in high-risk areas pay more. Also, the premiums can also be affected by factors such as the age of the building, number of floors and also the location of the contents in the building.
In instances where one's business needs a cover of more than $500,000, they can opt to have extra coverage. Such would mean that you purchase an excess flood insurance policy which covers up to $1 million for more premium.
Who Provides Commercial Flood Insurance?
Flood insurance is mostly provided by the federal government through the National Flood Insurance Program (NFIP). The insurance policy by the NFIP will cover all types of floods including flash flooding, storm surges, mudslides or snowmelt.
NFIP is provided by insurance professionals on behalf of the federal government. Apart from the NFIP, there are private insurers who offer coverage against loss occasioned by floods. Therefore, you can look into both options then get to determine which insurance provider will meet the needs of your business.
FEMA usually requires a 30-day waiting period for new business flood insurance policies. That means it's important to buy a commercial flood policy before a possible flood event is headed in your direction.
What Is Covered By Commercial Flood Insurance?
Generally commercial flood insurance covers damage to your building and contents caused by flood. This includes losses resulting from water from over flowing rivers or streams, rain, storm surge, snow melt, blocked storm drainage systems, broken dams or other like causes. To be considered a flood, waters must cover at least two acres or flood at least two properties.
Both the building and its contents can be covered for up to $500,000 For primary coverage on buildings, the coverage would includes repairing or replacing things such as a damaged air conditioning, water heaters or electric systems. On the other hand, the contents in the building that will be replaced include machines on the property, inventory, and also merchandise.
What Isn't Covered By Commercial Flood Insurance?
Beyond knowing what your insurance will cover, it is also necessary to know what is not covered by your commercial flood insurance policy. Most of flood insurance does not cover the loss of property outside your building. To add on that, if you take an insurance coverage provided by the NFIP, they do not offer Business Interruption coverage. This means that the insurance will not compensate you for the income losses suffered when the business was closed down.
The good news is there are private insurers who provide Business Interruption coverage. Also, one can opt to purchase the excess commercial flood coverage. This coverage includes compensating the business for the time period which they did not operate.
Who Should Consider Buying Commercial Flood Insurance?
Commercial flood insurance can be purchased by anyone who has a business in a commercial location. In some instances, business flood insurance is mandatory. Some businesses are located in high-risk areas or have a mortgage which is federally regulated by an insured lender must have flood insurance.
You find out if your business is in a high-risk area by looking at the FEMA Flood Map Service Center Flood Map. Use this link to find your official flood map, access a range of other flood hazard products, and take advantage of tools for better understanding flood risk.
The map highlights places which are more prone to experience floods. This helps businesses tell if they need to get a commercial flood insurance policy and which type of coverage they should get.
What Do NFIP Acronyms Mean?
Here are some of the common acronyms used in the National Flood Insurance Program:
NFIP Acronym | Meaning |
---|---|
AAD | Annual Average Damage |
ABFE | Advisory Base Flood Elevation |
ADMP | Area Drainage Master Plan |
ANI | Area Not Included |
ARI | Average Recurrence Interval |
ASDSO | Association of State Dam Safety Officials |
ASSPM | Association of State Floodplain Managers |
BFE | Base Flood Elevation |
CAC | Community Assistance Contact |
CAP | Community Assistance Program |
CBRA | Coastal Barrier Resources Act |
CBRS | Coastal Barrier Resources System |
CCO | Consultation Coordination Officer |
CDBG | Community Development Block Grant |
CFR | Code of Federal Regulations |
CIF | Contracts In Force |
CFS | Cubic feet per second |
CLOMA | Conditional Letter of Map Amendment |
CLOMR | Conditional Letter of Map Revision |
CLOMR - F | Conditional Letter of Map Revision Based on Fill |
COE | (U.S. Army) Corps of Engineers |
CRS | Community Rating System |
DFCO | Deputy Federal Coordinating Officer |
DFIRM | Digital Flood Insurance Rate Map |
DFO | Disaster Field Office |
DHS | Department of Homeland Security |
DLG | Digital Line Graph |
DOB | Duplication of Benefits |
DSR | Damage Survey Report |
EIS | Environmental Impact Statement |
EMC | Emergency Management Coordinator |
EO | Executive Order |
ERM | Elevation Reference Mark |
ESDP | Engineering Study Data Package |
FBFM | Flood Boundary and Floodway Map |
FCO | Federal Coordinating Officer |
FDPA | Flood Disaster Protection Act |
FDT | Floodway Data Table |
FEMA | Federal Emergency Management Agency |
FFED | Final Flood Elevation Determination |
FHBM | Flood Hazard Boundary Map |
FHMO | Federal Hazard Mitigation Officer |
FIA | Federal Insurance Administration |
FICO | Flood Insurance Claim Office |
FIMA | Federal Insurance and Mitigation Administration |
FIRM | Flood Insurance Rate Map |
FIS | Flood Insurance Study |
FMA | Flood Mitigation Assistance Program |
FMSIS | Flood Map Status Information System |
FMV | Fair Market Value |
FOIA | Freedom Of Information Act |
FONSI | Finding Of No Significant Impact |
FPA | Flood-Prone Area |
FPI | Force Placed Insurance |
FPM | Floodplain Management or Manager |
FZD | Flood Zone Determination |
GFI | Group Flood Insurance |
GIS | Geographic Information System |
GPO | Government Printing Office |
GSE | Government Sponsored Enterprise |
HAZUS | Hazards United States |
HEC | Hydrologic Engineering Center |
HMGP | Hazard Mitigation Grant Program |
HMO | Hazard Mitigation Officer |
HUD | Housing and Urban Development |
IA | Individual Assistance |
ICC | Increased Cost of Compliance |
JFR | Joint Final Rule |
KCFS | Thousand cubic feet per second |
LAG | Lowest Adjacent Grade (to a structure) |
LFD | Letter of Final Determination |
LMMP | Limited Map Maintenance Program |
LODR | Letter of Determination Review |
LOMA | Letter of Map Amendment |
LOMC | Letter of Map Change |
LOMR | Letter of Map Revision |
LOMR-F | Letter of Map Revision Based on Fill |
MHIP | Multi-Year Hazard Identification Plan |
MSC | Map Service Center |
MT | Mitigation Directorate |
NAVD | North American Vertical Datum of 1988 |
NFIP | National Flood Insurance Program |
NFIRA | National Flood Insurance Reform Act |
NGVD | National Geodetic Vertical Datum of 1929 |
NN | Non-participating NFIP community |
NSFHA | No (or Non) Special Flood Hazard Area |
OMB | Office of Management and Budget |
OPA | Otherwise Protected Area |
PDA | Preliminary Damage Assessment |
PL | Public Law |
PMF | Probable Maximum Flood |
PMP | Probable Maximum Precipitation |
PMR | Physical Map Revision |
PRP | Preferred Risk Policy |
RCBAP | Residential Condominium Building Association Policy |
RLS | Repetitive Loss Structure |
SCO | State Coordinating Officer |
SDF | Special Direct Facility |
SEMA | State Emergency Management Agency |
SFHA | Special Flood Hazard Area |
SFHDF | Standard Flood Hazard Determination Form |
SFIP | Standard Flood Insurance Policy |
TEC | Technical Evaluation Contractor |
TB | Technical Bulletin |
USACE | U.S. Army Corps of Engineers |
WYO | Write Your Own |
What Does Commercial Flood Insurance Cover & Pay For?
Here are a few examples of commercial flood insurance claims and how insurance can help pay for the losses:
A restaurant owner experiences flooding due to heavy rain and the rising of nearby rivers or lakes. The flood causes damage to the building structure, furniture, equipment, and inventory. With commercial flood insurance, the owner can file a claim to cover the costs of repairs and replacement of damaged property, including lost income due to the closure of the business during repairs.
A small business owner operates a retail store located in a flood-prone area. During a severe storm, floodwater damages the store's merchandise, furniture, and fixtures. The business owner can file a commercial flood insurance claim to cover the cost of repairs and replacements.
A manufacturer experiences flooding in their warehouse due to a nearby river overflowing its banks. The flood damages the machinery and raw materials, causing significant business interruption. With commercial flood insurance, the manufacturer can file a claim to cover the cost of repairs or replacement of damaged machinery and raw materials.
In each of these examples, commercial flood insurance can help business owners recover from the financial losses caused by flooding. The insurance policy can cover the cost of repairs or replacement of damaged property. Without commercial flood insurance, business owners may face significant financial hardship and potentially even bankruptcy due to the costs of repairing damage caused by flooding.
Commercial Flood Insurance - The Bottom Line
Natural disasters can be devastating to a business. Damage caused by some types of natural events like lightning or wind will usually be covered by a commercial property insurance policy. But your business needs a special commercial flood policy if you want protection from damages from flooding. It ensures that you are covered against losses or damage, to your building or the contents in it, following a flood.
Additional Resources For Commercial Property Insurance
Read up on small business commercial property insurance, including how business property insurance protects your company's building's and/or their contents from damage, destruction, theft and vandalism.
- Apartment Building
- Business Interruption
- Commercial Flood Insurance
- Commercial Property
- Condo Association
- Contractors Equipment
- Duplex Rental Property
- Dwelling
- Equipment Breakdown Protection Insurance
- Homeowners Association Insurance
- Inland Marine
- Jewelers Block
- Manufacturing And Mercantile Rental Property
- Mobile Home Park
- Non-Residential Building Operators
- Office Buildings
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
- Specialty Habitational
- Specialty Inland Marine
- Specialty Property

Commercial property insurance is a type of insurance that provides coverage for businesses against losses or damages to their business property. This can include buildings, equipment, inventory, and other assets owned by the business.
There are several types of commercial property insurance, including standard property insurance, business interruption insurance, and contents insurance.
- Standard property insurance covers damages to the physical structure of the business, such as the building, walls, and roof.
- Business interruption insurance covers lost income and expenses incurred during the repair or rebuilding process.
- Contents insurance covers damages to personal property within the business, such as office equipment and furniture.
Commercial property insurance is important for businesses of all sizes, as it helps protect against financial losses due to unforeseen circumstances, such as natural disasters, theft, or vandalism. It can also provide liability coverage in case of accidents or injuries on the business property.
To determine the appropriate level of property insurance for a business, it is important to consider the value of the business's assets, the location of the business, and the potential risks it faces. Many businesses choose to work with an insurance agent or broker to help identify the best coverage options for their specific needs.
Overall, commercial property insurance is a crucial part of any business's risk management strategy, helping to protect against financial losses and ensuring the long-term viability of the business.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Contractors' Equipment, Fine Arts, Cyber Liability, Employment-related Practices, Automobile Liability and Physical Damage, and Stop Gap Liability.