Flood Insurance May Not Be an Option for Your Business
Your Business May Not Be Eligible For Flood Insurance.
You read that correctly. Flood insurance may not be an option. In some situations, it is a requirement. Financial institutions, investors and others expect you to protect their investments and property.
They will not leave the insurance decision in your hands. Sometimes, it’s one of the costs of doing business.
Insurance companies distinguish between water damage and floods. Rising water causes flood damage. Typical examples are:
- Overflowing rivers and streams
- Storm surge on large bodies of water
- Local flooding due to heavy rain or blocked storm drains
- Runoff from melting ice and snow
Weather, plumbing and fire sprinklers are common sources of water damage. A standard commercial insurance policy covers the cost of these repairs. It offers no coverage for floods. The following are situations that may require a business to have insurance.
1. The Federal Government funded, backed, or insured a business mortgage. If your business is in a flood zone, the government requires you to have flood insurance. It’s the law. If a flood destroys the business, they want to get paid.
2. Other mortgage lenders may require the insurance. Lenders want to protect their investment as well. They may even want the insurance for businesses near flood zones.
3. Investors may demand insurance. If there is a flood, the investor’s investment is at risk. It is reasonable for them to expect the protection of their investment.
4. Certain customers and vendors may require insurance. A distribution business ships inventory belonging to their customer. Other businesses may hold inventory consigned by a vendor. Both parties may want insurance protection for their inventory.
The Flood Happened and the Damage Is Extensive
That flood insurance sure was a great idea. The water is gone. Now, it’s a race against mold. There are flood and water damage remediation specialists in the Lakeland, FL, area. They can get you back on your feet quickly. Give them a call.