High, Moderate or Low Flood Risk, You Still Need Coverage

It’s hurricane season, but the next tropical storm is not the only water threat to your business. Flooding is frequently caused by snowmelt, rainstorms, inadequate drainage systems, and broken levees or dams. In fact, FEMA’s National Flood Insurance Program (NFIP) works on the assumption that everyone lives in a flood zone. The only question is whether it’s a low-, moderate-, or high-risk area. In fact, you’re not protected even if your building is built on a hill; although your company may be located in a low-risk area such as this, you still need flood insurance.

Depending on your mortgage program, many lenders require flood insurance. However, even if they don’t, insurance is still recommended and advisable to protect your business; roughly 20% of NFIP claims and 33% of disaster assistance for flooding involve areas considered at low or moderate risk.

So for the most part, you do need flood insurance. The good news is that low-risk-area businesses will pay less for coverage.

Flood insurance coverage is purchased through an insurance agent, and most insurance companies can obtain coverage through the NFIP, a federal program that offers set rates. The rate for your particular business will depend on factors such as the date of construction, building design, amount of coverage requested, and the area’s risk level.

Twenty-five percent of businesses that close after a flood event never reopen. Be one of the 75% that do. And don’t delay. A 30-day waiting period from the day of purchase is standard.