Your basic commercial property insurance plan can generally be expected to cover all of the major disasters and hazards that may impact your business. These will typically include fire, burst pipes, storms, vandalism and theft, and even, in some cases, riots and social unrest. There is one major exception, however: Flooding. Here’s why.
Supply And Demand
Insurance is a somewhat unique market in that the demand actually creates the supply. When enough people are willing to pay to have their home covered, insurers will have the funds to pay out when someone files a claim. Private insurers generally don't cover flood because the demand isn't high enough to create a supply.
Getting Protected Against Flooding
Flooding might not be a major concern where you live, and many business owners simply choose not to worry about it. If you want to make sure that you're protected against every possible disaster, however, you do have a few options for getting insured against flooding.
- The NFIP, or National Flood Insurance Program, is a government-issued insurance policy that will protect you against flooding. The aim of the NFIP is to help reduce the economic impact of flooding on affected areas. When a business suffers following a flood, it's not just the business that suffers, but the community. Uncovered flooding damages mean lost jobs.
- Ask your insurer about private flood policies. Some insurers simply don't offer flood insurance at all, while others do offer it, but not as part of a basic policy. You won't know if your insurer offers flood coverage until you ask.
- Seek out another insurer. You don't need to get all of your insurance from a single provider. Even if you're happy with your commercial insurance provider, you can still seek out another insurer to get flood protection. If you work with an independent insurance agent, they can help you compare the policies of multiple providers.
These rules tend to apply to both commercial property insurance and home insurance. Whether or not a provider offers flood insurance, chances are it's not going to be included on a basic policy. You should take the time to read your policy over and make sure that you know exactly what is and isn't covered. Flooding might not be a major threat where your business is located, but it's better to know what you're protected against before disaster strikes rather than after.
Also Read: Do I have to buy flood insurance for my business?