Flood Insurance for Your Business: What You Need to Know for 2020

It’s the time of year again here in the Northeast! The weather is warmer and it’s time to enjoy the outdoors. Spring showers are falling and hurricane season is on the horizon. This brings the topic of flood insurance to the forefront of the conversation for commercial property and casualty insurance professionals.

When it comes to looking into flood insurance for your business, remember that flood insurance is typically not covered in a traditional homeowner or commercial property policy. With that in mind, it’s a good idea to have a conversation with your insurance agent or broker to talk about coverage options.

The National Flood Insurance Program (NFIP), a federal program managed by the Federal Emergency Management Administration (FEMA), provides flood insurance options to property owners, renters and businesses. For a long time, the NFIP was the only market to purchase flood insurance coverage. However, in 2012, passage of the Biggert-Waters Flood Insurance Reform Act encouraged private insurance carriers to launch flood insurance solutions.

At Rose & Kiernan, Inc. we have access to both the NFIP and private flood insurance coverage. There are maximum limits through the NFIP, as currently authorized by Congress:

  • Residential buildings (with less than five units) – $250,000 for the building and $100,000 for personal property
  • Other residential buildings (with five units or more) – $500,000 for the building and $100,000 for personal property
  • Commercial properties – $500,000 for the building and $100,000 for business personal property

Knowing that these limits exist is important when considering flood insurance for your business. Private insurance carriers will almost always allow for higher limits. Additionally, under a standard NFIP flood insurance policy, coverage for any floor below ground (such as a basement) is limited. Items such as docks, fences, foliage, septic tanks and swimming pools are not covered. Note, too, that outbuildings must be insured separately, with the exception of single-family homes with detached garages. Also, coverages for additional items such as business interruption, loss of rents and loss of use are not available under a standard NFIP policy.

This may sound daunting, but not to worry! It just means that flood insurance for your business involves a careful and comprehensive approach. We’re happy to review your business’ risk and provide recommendations. 

If you have any questions about flood insurance for your business, please contact Rose & Kiernan, Inc. here or by calling 800-242-2433.

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