Navigating the Waters: Flood Insurance for Business

Date: June 02, 2015

After years of drought, the recent devastating floods in Texas have exposed a major issue for small businesses—many do not carry flood insurance. To get more information on this important topic, we tapped into the insurance expertise of Information Services Expert Jim Gavin of Independent Insurance Agents of Texas, the nation’s largest state association of Trusted Choice® agencies that is also a NFIB/Texas member. He pointed out that flood insurance is excluded in every business policy as a general rule of thumb, and that this may be included upon specific request.
 
According to National Flood Insurance Program (NFIP) floods are the number one natural disaster in the U.S. and at least 25 percent of businesses that close due to flooding, never reopen. These recent floods have taught us that understanding high risk zones serve as a general guide in rapidly rising water, but that flooding can happen everywhere in Texas, just as it did in El Paso in 2013. Flood insurance is administered by the NFIP through Federal Emergency Management Agency (FEMA) and can be inexpensive if your business is not in a high risk zone.
 
“Everyone typically has windstorm coverage included in their policy,” said Gavin. “It’s the standard exclusion in the policy that business owners need to be aware of including flood, surface water, and mudflow.”
Business owners left with damage after a flood may turn to the FEMA loan program executed by the Small Business Association, which offers low interest rates, but be forewarned that some business owners have experienced a two year process time. When Hurricane Rita hit some home owners waited two and a half years to receive funding for housing. 
When renewing your business insurance policy this year, be sure to talk to your agent about flood insurance or you can go directly to NFIP, but don’t wait until the waters are rising. 

Related Content: Small Business News | Insurance | Texas

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