3 Huge Expenses That Only Flood Insuance Will Cover

5/10/2022 (Permalink)

Without Flood Coverage You Could Be Paying These Costs Yourself

Most business owners carry property insurance for commercial buildings, but the majority are not insured against flood damage. For insurance purposes, “flood damage” refers to damage caused by storm winds or storm surges, mudslides or flash floods, or overflowing lakes and rivers. This kind of damage is covered exclusively by commercial flood insurance; it is never covered by any other type of policy. 

1. Restoration and Repairs
Without a flood policy, you’ll be on the hook to pay for the initial cleanup and debris removal, the cost to repair or replace damaged ceilings, walls, floors, and/or major systems like plumbing or electrical. Also, since floodwater is filled with contaminants like mold and bacteria, you’ll need to pay for professional decontamination and other remediation and restoration expenses. Furthermore, if floodwater damages any inventory, equipment, tools and machinery, furniture, or electronics, these losses are not covered by commercial property insurance.

2. Compliance Upgrades
If flood damage to your building requires substantial repairs, the local code enforcement for Maple Grove, MN will likely oversee the work and issue the necessary permits. However, if the relevant codes or building standards have changed since your building was built, you’ll have to upgrade the building to comply with the new standards. Only flood insurance policies include “Increased Cost of Compliance” coverage, which covers the costs of these necessary upgrades.

3. Preventative Measures
Flood coverage is the only kind of commercial insurance that will pay for the cost of placing sandbags or boarding up windows before a predicted storm or flood event or cover the cost of moving valuables and storing them offsite ahead of a storm.
Some locations are at a higher risk for flood damage than others, although roughly one-third of all flood damage claims each year occur in low-risk areas. If you’re not prepared to pay for the costs of flood damage out of pocket, a commercial flood insurance policy could be a wise investment.