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Business flood insurance is an insurance type that is designed to protect businesses from financial losses caused by flooding. It differs from commercial property insurance, which normally does not cover flood damage.
Business flood insurance specifically addresses issues and risks that result from flooding. It is designed to help businesses recover from flood-related damages.
If your business is within a flood-prone area, you may need to consider acquiring business flood insurance.
Why Is Business Flood Insurance Important?
Business flood insurance is important for several reasons:
Finances – Flood damage can cause significant financial issues for a business. With business flood insurance you can rest assured that the costs associated with property damage, inventory, equipment, and other assets will be covered.
Risks – Flood insurance can be seen as a proactive step toward mitigating the financial impact of a flood. It can help businesses recover quicker and more efficiently.
Requirements – A business may be required to obtain flood insurance if it is in a high-risk flood zone and has a mortgage from a federally regulated or insured lender. In some cases, the lender will mandate a business to obtain business flood insurance.
Operations – A flood can significantly disrupt a business’s operations. When you have business flood insurance it can cover the costs of business interruption, including expenses related to temporary relocation and loss of income during the recovery period.
What Factors Determine the Costs of Business Flood Insurance?
The cost of business flood insurance can depend on various factors:
Location – Where a business is located can play a significant role in the cost of flood insurance. If a property is located within a high-risk flood zone, it’s likely to have a higher premium.
Flood Zone – The Federal Emergency Management Agency (FEMA) has designated flood zones based on risk level. Properties located within high-risk areas can expect to pay a higher insurance premium. Find out if your property is in a high-risk flood zone by visiting FEMA’s Flood Map Service Center.
Building Design – The design of a building and the construction materials can impact the cost of business flood insurance. Other factors such as elevation, foundation type, and the building’s age can also play a part in the premium cost.
Mitigation Efforts – When you show an insurer that you’ve taken steps to mitigate risks it can impact your insurance premium. For example, a business can install flood barriers or elevate the building to prevent flood damage.
Claims History – Insurance companies will look at past claims to determine a business’s premium. If a business has a history of filing frequent claims, it can be considered a higher risk and face higher premiums.
How Can Businesses Get a Discount on Business Flood Insurance?
If you would like to obtain a discount on business flood insurance, you may have to take a few proactive steps. These are some common strategies that could potentially help you reduce your business flood insurance premium.
Risk Mitigation – When a business begins flood risk mitigation efforts, it can help reduce the insurance premium. Some insurance companies offer discounts as an incentive for completing risk mitigation steps.
Elevation Certificate – An accurate elevation certificate allows insurers to better assess flood risk. If a business obtains an elevation certificate, it may qualify for a lower premium. Make sure you use a licensed surveyor.
CRS Participation – The National Flood Insurance Program offers the Community Rating System. It provides incentives for communities that go beyond the required floodplain management mandates. A business that participates in the CRS could be eligible for a discount.
How Can Biscayne Risk & Insurance Group Help You With Business Flood Insurance?
Business flood insurance is vital for businesses that face the threat of flooding. It offers financial protection, mitigates risks, and ensures a business can continue to operate despite flood damages.
If you need comprehensive business flood insurance, look to Biscayne Risk. We offer tailored coverage and competitive premiums.
The Biscayne Risk team is experienced and ready to assist you with your business flood insurance needs. We can also help you obtain similar coverage options such as commercial property insurance.
Please contact us to learn more about our coverage options. We look forward to working with you!