Nothing is impervious to water. Somehow we don’t think about how destructive little raindrops can be. If there’s a bad storm we think about trees falling, hail pelting windows and cars, branches being thrown around like twigs – you know, the usual. But somehow we forget about the water.
Flooding can happen for a variety of reasons, not just from heavy rain or even hurricanes (although both can create some pretty serious deluges.) Mudslides can cause flooding. So can snowmelt that runs into rivers. There’s also the possibility that nearby development and construction can change the land so that it can’t drain like it should. At any rate, when your building is doing its best impression of a swimming pool, it doesn’t really matter what caused the flooding in the first place. You just want the water out of there.
While we can’t completely shut Mother Nature and her swamps of water out, being prepared can help reduce the damage your business could face from a surprise flood. We’ll explain the basics of commercial flood insurance, but we’ll also go over some ways that you can bolster your business’s defenses against flooding.
Isn’t flooding covered under my current insurance BOP?
Well … no. It’s not. A traditional BOP won’t cover flood damage to your business. It’s just one of those things that aren’t included in a typical policy, meaning that you need to go in search of your own coverage if you want to be protected from flooding.
Which leads us to, where can I get flood insurance for my business?
Commercial flood insurance is only available through the National Flood Insurance Program (NFIP). Agents who deal with flood insurance are accountable to the NFIP to keep prices from going too crazy. It’s a bit complicated, but commercial flood insurance is funded by the government but sold through private insurers.
Keep in mind that NFIP flood insurance covers every type of flooding except for landslides.
Would I ever be required to have flood insurance for my building?
Yes. You are required to have flood insurance if your business is in a high-risk area that’s in danger of flooding and your mortgage is with a lender that is overseen or insured by the federal government. Your location determines what kind of risk you face.
To explain a bit more about high-risk versus low-risk: the NFIP zones different areas into categories based on their location and chances of facing a flood. Higher risk businesses might be those located near an ocean, lake, stream, or river — basically, any kind of water that could intrude on your premises. You can check and see what your flood risk is by visiting www.floodsmart.gov.
Do I have to have flood insurance if I’m not in a high-risk area?
Not legally, no, but keep in mind that the NFIP reports that one-third of all claims are from businesses in low-risk areas. Floods can happen even if you’re not in a coastal area. Remember how we talked about super rainstorms? And how construction can change the draining patterns of the land?
The good news is that flood insurance isn’t just for high-risk businesses. You can get a preferred risk policy if you’re in a low-risk area but want to make sure that you’re extra protected.
What factors contribute to my premium?
There are a few things that influence the premium you could be paying for flood insurance:
- How old the building is
- How many people work there
- How tall the building is
- Where your business is located within the building (if you share your space)
- Your deductible
- The building/contents coverage that you choose
- Whether you’ve put flood prevention measures in place
And with that segue, how can I protect my business from flood damage?
You can be proactive and take steps to reduce the damage and losses that your business would face in the event of a flood. Some things you can do are:
1. Get flood boards.
If you know that you’re about to get walloped by a major storm, you can put up flood boards to protect your business. Sometimes we’re lucky enough to have a bit of warning before a flood happens, so we can attempt to minimize the damage.
2. Make sure the floors are well-sealed.
Can’t have water seeping up from the ground and through the floor, can we?
3. Have high shelves.
This one’s plain logic. The higher up things are in your building, the less likely they are to be consumed by a flood. If you’ve got some good, high shelving in place, you can pile your valuable items onto them to keep them out of the water’s grasp.
4. Check your electrical supply.
Make sure that your outlets, fuse boxes, etc. are high enough to escape being fried. You should take your area’s flood history into account by finding out how high the water has come before. Electricity and water are not friends.
It’s also a good idea to know how to shut off the utilities for your business in case you face an emergency. You just never know when you might need to turn them off.
5. Invest in a pump.
Having a pump can help make the cleanup and recovery easier if you do ever encounter a flood.
6. Stockpile supplies.
It would be helpful to have some emergency supplies on-hand. Plywood, sandbags, plastic sheets, nails and hammers, and the like can come in handy.
7. Trip out your pipes.
Do your pipes have non-return valves? Do both the inlet and the outlet pipes have non-return valves?
8. Have your emergency phone numbers handy.
Know who you would have to call if the building floods and have their numbers easily accessible. It won’t help if you have to scramble around for a phone number … or if the phone numbers were eaten by flood water.
9. Know what you’re going to do to keep your business going.
The show must go on, right? You need to have a flood battle plan so that you know how you can keep things going while your building is repaired. Is there a location that you can work out of temporarily? How will you continue to assist and support your clients since you’ve been so rudely ousted from your building? How will you access your records and other information you might need?
10. Train your employees.
Once you’ve made your flood battle plan (basically your what-would-happen-if plan) make sure your employees know what it is. You should make sure to post it somewhere that everyone will be able to see and review it, and you should also talk about it and go over it with them. The plan should include:
- Emergency contact info
- Map of important places in the building (where supplies are located, where the utility shut-off is, etc.)
- How they can protect their belongings and the company’s property
- What they can do to minimize business interruption
- Checklists of what would need to be done in different scenarios
- A meeting place in case an emergency evacuation is required
It’s always a good idea to make sure that everyone knows how to handle a disaster or a potential disaster.
Preparation is everything when it comes to handling a natural disaster. You’ll be doing yourself a huge favor if you take the time to protect your business from flood damage before Mother Nature decides to swamp your building for what seems like no reason at all. Remember, it’s never just a little water. Many businesses that face flooding or other disasters don’t ever come back from them.
On that somber note, if you have any questions about your insurance policy or are interested in getting free business insurance quotes, let us know! We love insurance, so we’re more than happy to talk to you about your risks and how you can stay protected from them.