Does Business Insurance Cover Floods?

Businesses of all kinds can be vulnerable to many types of water damage, including flooding, regardless of their location. Part of a complete business insurance policy is commercial property insurance. While commercial property insurance covers many different types of disasters, unfortunately, it doesn't cover every type of possible water damage to your business, including natural flooding.

An independent insurance agent can help your business get equipped with all the protection it needs against flooding and more. They'll make sure to get you matched with the right policy that considers all types of disasters. But first, here's a deep dive into business insurance and flooding.

Does Business Insurance Cover Water Damage?

Your business insurance policy should include commercial property coverage to help reimburse for losses related to damaged or destroyed property, including your office building, storefront, or other structure, as well as inventory and equipment used by your company. Commercial property insurance can cover many different types of disasters, including:

However, commercial property insurance often doesn't cover water damage to your business property. There are a couple of exceptions to this rule, though.

Does Commercial Property Insurance Cover Flooding?

Most types of flooding aren't covered by commercial property insurance or any other part of standard business insurance. An exception is if the cause of flooding in your business is due to burst pipes. The cause of the busted pipes must have been sudden, accidental, and unexpected to be covered. A lack of maintenance on your business's plumbing that leads to a burst pipe won't be covered.

Other sources of flooding typically aren't covered by business insurance. This means that if your business floods due to a natural disaster, such as heavy rainfall, melting snow, hurricanes, tsunamis, etc., a regular business insurance policy won't reimburse you for the damage. You'd need a separate commercial flood insurance policy for your business to have coverage against natural sources of flooding. 

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What Else Isn't Covered by Business Insurance?

Business insurance comes with a few exclusions you need to be aware of. Being familiar with exactly what's covered by your policy can save you from the hassle of filing claims that are bound to be denied by your carrier. It can also allow you to purchase other types of coverage to increase your protection before a disaster occurs. Here are some other common business insurance exclusions:

You can supplement your standard business insurance policy with additional coverages to protect against some of these excluded items. For example, getting a separate earthquake insurance policy can protect your business against earthquake damage. You can protect business property that's in transit, such as being transported between job sites, with an inland marine insurance policy. 

If you have company vehicles, you'll need a commercial auto insurance policy to protect them against damage from accidents and resulting lawsuits, as well as theft and vandalism. 

Finally, you can protect your business against sewer backups and line breaks by adding a sewer backup endorsement to your policy. Your independent insurance agent can help you add all the additional types of coverage you need to your business insurance.

How Can I Bundle Business Insurance Coverages?

A convenient way to get a few of the key coverages your business needs is by getting a business owners policy (BOP). These policies are ideal for small to medium businesses and bundle a few of the main components of a larger business insurance policy. Business owners policies include:

• Commercial property insurance: This provides reimbursement for damage, destruction, theft, or vandalism to your business's property, like its buildings and inventory.
• Business interruption insurance: This provides reimbursement for temporary covered closures if your business must shut down due to a disaster, like a fire.
• Commercial general liability insurance: This provides reimbursement for lawsuit expenses if a third party claims your business caused them bodily injury or personal property damage.

Ask a local independent insurance agent if a BOP is right for your business. Note that a BOP also doesn't provide coverage for flood damage.

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Why Work Together with an Independent Insurance Agent?

An independent insurance agent can shop and compare business insurance policies from several different carriers to find you the overall best blend of coverage and cost. They make the journey of finding coverage much simpler and more streamlined for you. They can also help you file claims or update your coverage down the road.