During the first week of October, Hurricane Matthew swept through the Caribbean and caused massive flood surges along the Southeastern coast of the US. It’s estimated that the storm caused $4-6 billion in property damage, and this doesn’t even begin to measure the economic loss due to small businesses that will fail in its wake. According to FEMA, nearly 40% of small businesses never reopen following a natural disaster.
Should my small business have flood insurance?
Purchasing commercial flood insurance can be a difficult decision for small business owners. Flood insurance can be expensive, and the likelihood of a flood may seem rare if you’re in a low risk area. On the other hand, the risk of not protecting your business from a flood can be even more costly. The cost of a few inches of water climbs swiftly into tens of thousands of dollars, and with over 20% of claims being filed from low risk areas, the argument for having flood insurance becomes very clear.
In most cases, commercial flood insurance takes around 30 days to kick in. Buying at the last minute is not an option. However, your state may have a relief fund for small businesses that are affected by natural disasters. Keep an eye out for programs like this when you are assessing damages and making insurance decisions.
Flood risk area
Do you know your area’s flood risk level? If not, you can visit FEMA’s Flood Map and get your area’s risk level by entering your business address.
If you’re in a high risk area, commercial flood insurance is a necessity. Most high risk areas in the US will require that your business have it. If you need commercial flood insurance, we can find the right coverage for you.
Depending on how much coverage you want, and the risk level in your area, commercial flood insurance can cost between $500-$3,000 annually. This may seem like a lot of money, but from 2006-2010 the average commercial flood claim cost more than $85,000. If you’re in a low-to-medium risk area, you’ll have to weigh the costs and benefits to figure out if your small business needs commercial flood insurance.