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:
- 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?
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, contruction 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:
|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|
|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|
|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|
|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|
|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|
|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|
|USACE||U.S. Army Corps of Engineers|
|WYO||Write Your Own|
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.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
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
- Commercial Property Insurance Policy Coverage Forms
- Condo Association
- Contractors Equipment
- Duplex Rental Property
- Electronic Data Processing Equipment
- 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
- Safeco Landlord Insurance
- Shopping Center & Strip Mall
- Vacant Land
- Vacant Property
- What Are Commercial Property Insurance Endorsements?
Rental property owners, real estate developers and property managers should keep an accurate survey of each property they own or that is in their care. This survey should include inventories of furnishings and equipment at those properties. These documents establish the extent of their insurable interest, facilitate the arrangement and placement of insurance and minimize controversy and confusion if a loss occurs.
Insurance coverage on property, general liability and professional or errors and omissions liability should be arranged and placed for every real estate and rental property risk.
The main goal of any commercial property insurance program is to protect the insured's real and business personal property. Buildings and their contents property usually represents a significant portion of its total assets, regardless of the size of the business. A commercial property program can provide the coverage you need if a loss should occur.
The ISO Commercial Property Building and Personal Property Coverage Form is an insurance industry standard that provides this needed coverage. As a result, it should always be reviewed and used as a benchmark for comparison when evaluating any commercial property coverage form.
This policy treats business personal property as more than just the contents of a building. When there is a limit of insurance on the declarations, property can be covered if inside the building or structure or within 100 feet of the building or premises and either in the open, or even in or on a vehicle.
There are many endorsements available to tailor the ISO Commercial Property Coverage Forms. Some are mandatory for all policies while others are mandatory for specific classifications and types of business. Others are optional and permit a standard form to be customized to meet a specific risk's coverage needs. Endorsements broaden, restrict, delete, modify, or add coverage.
These policies can provide the following additional coverages for small specific limits of insurance: debris removal, preservation of property, fire department service charge, pollutant clean up and removal, increased cost of construction and electronic data.
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.