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Commercial Flood Insurance

Many business owners are surprised to learn that flood damage is not typically covered under a commercial property policy. Flood damage can be sudden, extensive and costly. 

Flood insurance in the United States is made available by the National Flood Insurance Program (NFIP) and managed by FEMA. However, there are limitations with these policies such as a maximum limit of $500,000 on buildings. This may prove problematic for businesses with high value buildings and equipment.

Fortunately there are options to obtain additional coverage through:

  • Private Flood Insurance – offered by a private insurer providing primary coverage instead of an NFIP policy.
  • Excess Flood Insurance – provides insurance on top of an NFIP policy, effectively extending the limits of flood coverage.


Who's if for?

Most lenders will require you to have flood insurance if you’re located in a special flood hazard area. You can search for your property on the FEMA website to see if located in or near one. Keep in mind these maps do change over time. Even properties not located in a high risk area may flood and without flood insurance you will typically need to pay for damages yourself since most commercial property policies exclude flood damage. Whether you’re required to carry coverage or are looking for added protection for your business we can help you find the flood coverage you need.

What does flood insurance cover?

Simple, flood damage right? Well yes, but we need to understand what is and what is not a flood.

The NFIP defines a flood as: “A general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow”

This is an important definition –  if your business property is damaged because your sump pump fails and water backs up into the building then flood insurance will not provide coverage, since it does not meet the criteria of a flood.

Now that we know what a “flood” is we can talk about what items are and are not covered:

Typically Covered
  • Appliances
  • Electrical & plumbing systems
  • Carpeting & flooring
  • Foundation walls, staircases
  • Fuel Tanks, well water tanks, solar equipment
  • Personal belongings
Not Covered
  • Damaged not caused by a “flood” (i.e. sewer backup)
  • Personal property in basements or outside
  • Currency and precious metals
  • Lost income \ Business interuption
  • Cars

Keep in Mind

As a federally administered program flood insurance is designed to provide robust coverage at an affordable price.

Not all communities participate in the NFIP and coverage options may vary depending on your location.