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Flood Insurance for Businesses

We recently shared some of our top tips for preventing floods in commercial properties. We touched on the importance of having comprehensive business insurance in place to protect you from damage, but today we’re going to discuss flood insurance for businesses in greater detail.

So, what kind of insurance would your business have in place if it were damaged by a flood? Unfortunately, a lot of business owners assume their regular business insurance would apply to flood damage. But the truth is, many insurance policies actually exclude flood damage. 

Flood insurance for businesses

To make sure they have the right coverage in place, businesses might want to consider purchasing commercial flood insurance through the National Flood Insurance Program (NFIP).

Here are some other things you should know about commercial flood insurance. 

What is covered by commercial flood insurance?

This coverage applies to the physical structure of your building, as well as the contents (including your inventory and equipment) inside of it. 

What doesn’t commercial flood insurance cover?

Most of the things outside of your property (think signage, septic systems, and landscaping) likely won’t be covered by flood insurance. On that some note, business interruption insurance isn’t included in your flood insurance. So if your business is interrupted by flood damage, you’ll need to have separate business interruption coverage.

Is flood insurance legally required?

There are some situations when you’ll need to purchase flood insurance for your business. This includes when your business is located in a high-risk flood area and you have a mortgage from an insured or federally regulated lender. 

What are the commercial flood policy limits?

Business owners can purchase flood insurance with up to $500,000 in coverage for their building. This is in addition to $500,000 of coverage for its contents.

Does commercial flood insurance cover mold? 

According to FEMA, damage caused by moisture, mildew, or mold that could have been avoided by the property owner is not covered by flood insurance. Additionally, damage caused by sewer or drain backup isn’t covered unless there’s a flood in the area that caused the backup. 
Would you like to hear more about the commercial insurance options for your small business? Get in touch with Fargo Moorhead Insurance today!

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