How Do I Know if My Business Needs Flood Insurance?

3/30/2022 (Permalink)

As a business owner in, you need to make sure you have the right coverage for your property when storms or other natural disasters hit your area.

How Do I Determine Whether My Company Requires Flood Insurance?

As a business owner in Seattle, WA, you need to make sure you have the right coverage for your property when storms or other natural disasters hit your area. Not all water damage is covered under a standard policy, so it's important to know whether you need separate flood insurance. You don't want to wait until your property has already sustained water damage to find out what your coverage includes.

Standard Policy

A standard commercial insurance policy usually covers water damage that happens:

• As a result of storms, such as wind damage, rain, hail, or lightning
• As a result of broken pipes or plumbing failures

However, most standard plans do not cover water damage that the insurance company determines to be caused by neglect:

• slow roof leaks
• slow plumbing leaks or groundwater seepage.

These are maintenance issues that fall under the owner's liability. If damage happens suddenly due to a storm or burst pipe, those claims are usually covered. Check with your agent to find out what is included in your policy, as each business is different and insurance coverage varies by company.

Federally-Mandated Flood Insurance

If your property sits on a known flood zone, the government requires you to have a separate flood insurance policy; usually, if that's the case, you would have purchased a policy when you were given a mortgage.

Separate Riders

Many insurance companies allow you to purchase separate riders to cover water or sewer damage not included in a regular policy or mandated by the government. Flooding can happen from storm surges, melting ice and snow, water main breaks, or the overflow of lakes, rivers and streams. Sewer damage is only covered through a rider of its own. Your agent can help you determine whether your risk is worth the expense of these extra policies.

It pays to be prepared and knowledgeable about your coverage before your building or its contents ever sustains water damage. A good flood insurance policy will not only cover the loss but also the cost of cleanup and remediation, saving you thousands of dollars and an enormous amount of stress.