The first signs of the spring flood season came in mid-March when the Ohio River reached 57.7 feet, its highest level in two decades, according to a report by SF Gate. The melting snow and rainfall swamped roads and forced businesses in low-lying areas of Cincinnati, Ohio, southeast Indiana, and northern Kentucky to a halt.
Other areas of the country may be affected, too. AccuWeather reports that because New England had so much snow, the region might experience some flooding from the thaw and spring rains. That's just more bad news for a region where businesses have already been disrupted from the blizzard conditions all winter (more about that here: "New England Snow and Business Interruption").
On that note, let's brush up on the damage floods can cause and how to protect your business.
Water, What Hast Thou Done?
Though snow and ice pose unique risks (among them, a spike in Workers' Compensation Insurance claims), few weather events have the power to wreak as much havoc as an unexpected flood. For example, a flood can…
- Warp hardwood floors.
- Damage carpets and furnishing.
- Cause structural damage to buildings.
- Compromise building foundations, triggering instability or partial collapse.
- Destroy electronic equipment.
- Cost hundreds of thousands of dollars in cleanup and repair costs.
For a real-world example of the damage a flood can do, read "Flood at UCLA Shows Importance of Updating Insurance Policies."
This may be a good time to remind you that flood damage is typically excluded from your Commercial Property Insurance. That also means that any business interruptions you experience because of flooding won't trigger your Business Interruption Insurance either – that policy only kicks in when a covered property event forces your business to temporarily close.
Does that mean it's lights out for businesses in flood-prone regions? Not exactly – you can always ask your insurance agent to add a Flood Insurance rider to your Property policy to cover your building and its contents. Flood Insurance costs depend on how much coverage you purchase, what the policy covers, and the extent of your property's flood risk.
Does My Small Business Need Flood Insurance?
Adding Flood Insurance to your business protection plan may be a good idea if your business is located next to a…
In reality, your business's proximity to any body of water puts it at risk of flood damage. And as we discussed above, that kind of destruction is nothing to take lightly. According to the National Flood Insurance Program (NFIP), the average commercial flood claim was more than $87,000 from 2008 to 2012. What's worse: the NFIP states that at least 25 percent of businesses that close to handle a flood never reopen.
If you're interested in Flood Insurance, there's usually a 30-day waiting period from the date of purchase until your coverage takes effect. So if you're worried about spring floods, don't wait to talk to your agent about adding on the appropriate coverage.