Many small-business owners assume they have flood insurance protection through their standard business policy only to find out they aren’t once disaster strikes.
You can fight back by buying a flood insurance policy to protect your business before experiencing the worst.
It’s an important step to protect your financial future, especially if your livelihood depends upon it.
Who Benefits From Flood Insurance?
Flood insurance provides more than basic protection against rising tides or overflowing rivers. It can also protect your business against inadvertent leaks or damages due to water-related problems. Not only does flood insurance protect your small business, but it also protects your employees and clients by reducing the risk of rebuilding and replacement costs associated with major flood losses.
Who is at Risk?
Obviously, any small business located in a flood-prone area is at greater risk. To determine the risk for your area, ask your insurance agent or visit FloodSmart.gov to calculate the risk to your small business. Remember, flooding is the number one cause of claims due to natural disasters, including hurricanes, rising rivers, tornadoes, flash floods and other associated losses.
How to Purchase
Purchasing small-business flood insurance isn’t that difficult, but it’s important to act sooner rather than later. Most policies exclude coverage for the first month, and many underwriters restrict the ability of an agent to issue a new policy once a severe weather warning has been put into effect. Never wait until the last minute. Instead, plan ahead to purchase the right policy for your small-business needs.
What to Include
When purchasing a small-business flood policy, you will be required to list covered assets. Be sure to include automobiles, equipment and all inventory. It’s a good idea to make a complete list that includes the make and model numbers. Be sure to update the list at least once per year to include new assets or eliminate older assets from the list. Specific high-priced items or inventory that is commonly used off-site may need to be covered under an additional policy rider. Your agent can assist in evaluating the best policy for your specific small-business needs.
It’s a good idea to ask whether or not your small business qualifies for reduced rates or other discounts based upon low- or moderate-risk flood zones or preferred risk policies. If not, you may still be able to obtain affordable flood insurance for your small business via the National Flood Insurance Program.
Keep track of your records and important policy documents, including inventory list, photographs of assets and other important information.
It’s a good idea to store a copy off-site in a safe-deposit box or online storage service. Be sure to include the contact information for your insurance agent. In the event of a claim, it is that much easier to access the required documents even if you are unable to enter the property.