Does Your Business Need Flood Insurance?
If your business in Providence, RI, is in an area prone to flooding, you should have insurance coverage for flooding. Most commercial insurance policies do not cover flood damage, but you can obtain a separate policy from the National Flood Insurance Program or a private insurer. This coverage may protect your business from potentially ruinous restoration costs. Here are three considerations for deciding whether your business needs flood coverage.
1. Are you required to carry flood coverage? If your commercial property is located in a high-risk flood zone and has a mortgage financed by a federally regulated or insured lender, you may be required to have a flood policy. Obtain coverage for flood damage from an insurance agent who specializes in commercial policies.
2. How much is the premium? Factor in the likelihood of flooding when choosing a location. Choosing a property in a known flood zone will result in higher premiums.
3. Do you really need flood insurance? If water comes from above, it is likely covered by a commercial package policy or business owner's policy. Flooding occurs when water overflows onto normally dry land from coastal or inland bodies of water: a stream or river, heavy rain, mudflow, erosion, or the accumulation and runoff of surface water. A flood policy may cover damage resulting from blocked storm drainage systems, broken dams or levies, and storm surges.
If flooding is likely in your business location, you should obtain sufficient coverage for the value of the property and the contents. A standard commercial flood policy can provide up to $500,000 of coverage for a commercial property and $500,000 for its contents. You may purchase excess coverage from a commercial insurance agency. Flood insurance offsets the cost of professional restoration after a flood event in Providence, RI. These policies can also cover mold, mildew, and other secondary damage caused by flooding.
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