Why Businesses Need Flood Insurance

Severe weather caused flooding across the nation throughout 2024. Flooding happens more often than people think.

A common but erroneous belief is that a property owner’s current insurance provides flood coverage when it doesn’t. Specifically, business insurance doesn’t protect against floods. When your clients are business owners, this myth can cause a rude awakening.

Now is the time to discuss how commercial flood insurance protection can help your clients ensure their businesses can rebound quickly after flooding. To lead that conversation, you need to understand the key differences between the two types of commercial flood protection the National Flood Insurance Program (NFIP) offers business owners.

What is Commercial Property Flood Insurance Coverage?

Commercial property flood insurance coverage is the coverage for direct physical damage to the building by or from a flood. The NFIP’s commercial property coverage offers up to $500,000 of protection for direct physical flood damage to a building.

Why Do Business Owners Need Commercial Property Coverage?

Even if it’s only inches of water, a flood can cause thousands of dollars of damage. Without insurance, those costs would be a burden on your client’s bottom line. When you talk about flood insurance, you’re helping your clients protect their livelihood and have peace of mind.

What is Personal Property Coverage?

This NFIP coverage insures the contents of your client’s business, such as product inventory, for up to $500,000.

Why Do Business Owners Need Personal Property Coverage?

This coverage does not include the actual building, but instead protects a variety of mission-critical things your clients’ business needs to operate.

This coverage insures things like:

• Furniture and business equipment.
• Stock, including merchandise held in storage, items on their salesfloor or even raw materials they use creating their products.
• Food freezers and the food inside them.

You can review the full list of what’s covered with your clients when you share the NFIP’s Summary of Coverage for Commercial Property brochure.

Which Coverage Does my Client Need?

The NFIP encourages business owners to purchase both types of coverage. Having both­­--contents and property coverage--ensures complete protection and support in getting their business up and running again after a flood.

Advise your clients to keep business records digitally (with appropriate backups) or outside of the business. If a flood washes through their area, having detailed accounting receipts ready and available can help their adjuster file a claim quickly and accurately.

Small businesses are a critical part of our American identity. With flood insurance, your clients can keep that American dream safe from flooding.