Does My Business Need Flood Insurance?

Of all the natural disasters, floods are the most common. Yet many businesses and homeowners do not carry insurance to protect them from this potentially devastating risk. The standard ISO commercial property and businessowners policies do not provide coverage for flood damage and thus coverage must be purchased separately from the National Flood Insurance Program (NFIP) through authorized insurers, or from some private insurers who have their own policies called “write your own” (WYO). The NFIP is a federal program administered by insurance professionals that will cover all types of floods, including flash floods, storm surges, mudslides or snowmelts. Flood policies offered by private insurers may differ in the type of flood events covered.

In determining whether a business needs flood insurance, the most determinant factor is location. If your business is located in a high-risk flood area and you have a mortgage from a federally regulated or insured lender, you are required to purchase a flood insurance policy. High-risk areas aren’t just the coasts, however. Riverine flooding is quite common, and areas near rivers are often flooded. NOAA predictions for 2019 indicated increased risk for moderate to major flooding in the upper, middle and lower Mississippi River basins, the Red River of the North, the Great Lakes, and the eastern Missouri River, lower Ohio River, lower Cumberland River and Tennessee River basins. However, even property located in a non-high risk flood zone can flood, evidenced by the fact that each year 20% of all flooding events across the U.S. are in areas considered low to moderate risk. You can determine the risk area your business is in by looking at the FEMA Flood Map Service Center Flood Map. The FEMA Flood Map Service Center (MSC) is the official online resource for all flood hazard mapping products created under the National Flood Insurance Program (NFIP), including each community’s flood map, called a Flood Insurance Rate Map (FIRM). Using the FEMA Flood Map Service Center website you can obtain an address specific flood map, access a range of other flood hazard products, and take advantage of tools for better understanding flood risk.