Flood Insurance for Commercial Property

When it comes to business insurance, many business owners don't think about flood insurance.  However, most do not realize that just like your homeowners insurance policy, your commercial property policy excludes flood coverage.  Last time Austin, TX saw flooding was this past October and the primary area that got hit was a residential area.  Most of the time, you don't hear when a business is impacted by a flood, but it does happen.  And when it does, it can have a huge impact on any business, small or large.  According to the National Flood Insurance Program, from 2008-2012, the average commercial claim was more than $87,000.  

There are several variables that determine the cost of flood insurance, things like, flood zone, the amount of coverage, and deductible can all impact the rate you will pay.  NFIP also lists on their website that the average rate for $50,000 in contents coverage is $183 per year  (this would be for a moderate-to-low risk).  You may be thinking, moderate-to-low risk, means chances are there won't be a flood.  Statistic show that nearly 20% of flood insurance claims come from moderate-to-low risk areas.  If you are in a high risk flood zone, you can definitely expect to pay more than $183 per year for obvious reasons.  
As far as what's covered and what's not covered, under a flood insurance policy, See below (taken from National Flood Insurance Program):

What IS insured under Building Property coverage:
• Insured building and its foundation
• Electrical and plumbing systems
• Water heaters
• Central air conditioning equipment, furnaces, and ventilating equipment
• Permanently installed carpeting over an unfinished floor
• Permanently installed paneling, wallboard, bookcases, and cabinets
• Pumps and machinery for operating pumps
• Awnings and canopies
• Walk-in freezers
• Outdoor antennas and aerials attached to buildings
• Fire extinguishing apparatus and fire sprinkler systems

What IS insured under Personal Property coverage:
• Furniture and fixtures, machinery and equipment, and other personal property owned by you and used in your business (See Section IV of your policy for exclusions)
• Stock as defined in Section II of your policy (merchandise held in storage or for sale, raw materials, and in-process or finished goods)
• Portable and window air conditioners
• Portable microwave ovens and portable dishwashers
• Carpets or rugs not included in building coverage (see Building Coverage)
• Clothes washers and dryers• Food freezers (other than walk-ins) and the food in any freezer
• Certain valuable items such as original artwork and furs (Limited to $2,500 in total)
• Non-licensed self-propelled vehicles if stored inside the insured building and used to service the described location (e.g., tractor) or designed to assist a person with a disability
• Up to 10 percent of contents coverage to improvements made to a building the insured occupies as a tenant

What is NOT insured by either Building Property or Personal Property coverage:
• Damage caused by moisture, mildew, or mold that could have been avoided by the property owner
• Damage caused by sewer or drain backup unless there is a flood in the area that caused the backup
• Currency; precious metals; and valuable papers such as stock certificates, script, and recorded data
• Property and belongings outside of a building, or in another structure, such as trees, plants, wells, septic systems, walkways, decks, patios, fences, seawalls, hot tubs, and swimming pools
• Financial losses caused by business interruption or loss of use of insured property
• Most self-propelled vehicles such as cars, including their parts

I also downloaded the document below from their website.  It has more details on the program and some tips that you might find helpful.  As always, if you have any questions or need and assistance, please feel free to contact us. 

nfip_summary_of_coverage.pdf
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