Why Your Business Needs Flood Coverage
Flood Coverage Through FEMA Is Necessary
Your commercial insurance policy includes coverage for fire and wind. However, it does not cover the cost of flood damage. If you want flood coverage for your Providence, RI, building, you need to purchase a separate policy through FEMA.
This flood policy is called the National Flood Insurance Program. While paying an extra insurance bill each month sounds like a pain, the cost is worth it in the long run.
A flood is essentially excess water on a normally dry area. According to the NFIP definition, a flood can result from any of the following:
- Overflow of tidal or inland waters
- Collapse of land along a shore
- Runoff of surface waters
When you sign up for commercial insurance, you must also decide how high of a deductible you are willing to pay. Higher deductibles reduce your claim payments but also lower your premiums. Your insurance agent can help you decide which deductible is best for you.
Understanding Flood Coverage
Before you buy flood insurance, you should understand exactly what it does and does not cover. You can use building property flood coverage to pay for damage to permanently installed items such as bookcases, panels, cabinets, and carpet. Air conditioning systems, water heaters, and electrical equipment are included in this coverage, as well.
Personal property flood insurance covers any items you own and use in your business, such as portable dishwashers, microwaves, and furniture. You can use the insurance money to replace these assets or to hire storm cleanup experts who can restore your belongings.
However, your insurance provider will reject your claim if the flood damage resulted from a drain backup that you failed to address. Items outside of your building, including fences and septic tanks, are also excluded from coverage.
Flood coverage through the NFIP is a necessary addition to any commercial insurance policy. Because flood cleanup is often costly, and inadequate insurance policy could cause your business to shut down permanently.