What is Commercial Flood Insurance?
Owners of commercial buildings and businesses need to protect their commercial entity with Commercial Flood Insurance. This is especially important in the state of Florida because, typically, this coverage is excluded from other commercial insurance policies.

What does Commercial Flood Insurance cover?
Commercial Flood Insurance provides protection to the insured for losses associated with flooding due to tropical storms, flooding rains, storm surges, and certain sewer backups. Two policies that are available are Basic Flood Insurance and Excess Flood Insurance.  The excess policy allows the insured to purchase additional coverage above the basic limit of $500,000.

What are some of the additional coverage options?
The basic policy form is fairly rigid, as mandated by the government-sponsored National Flood Insurance Program. However, the Excess Flood Insurance policy has additional options.  Some of the more common options are:

  • Replacement Cost Loss Settlement – allows claims to be paid without deductions for depreciation.
  • Business Income – provides limited protection to the insured for loss of earnings in the event of a covered flood.
  • Flexible Deductibles – allows the insured to select from a wide variety of deductibles. In many cases this feature is used to reduce costs.

Is Commercial Flood Insurance mandatory?
Florida has not legally mandated flood insurance, but in certain instances, this coverage is required. For example, generally, Commercial Flood Insurance is necessary in order to secure the approval of a bank loan for a commercial property located in a flood zone. In addition, recent changes in traditional weather patterns have resulted in the flooding of what were previously deemed non-flood zone areas. Therefore, more lenders are requiring Commercial Flood Insurance coverage.

What are some important factors in the determination of flood insurance rates?
There are two key factors in the determination of Florida flood insurance rates:

  • Flood Zone – All commercial properties are associated with a particular flood zone. The flood zone determines whether a specific property is considered a preferred risk.
  • Elevation Certificates – This certificate documents the elevation level of the commercial building. The elevation level is one of the factors which determines the premium for the policy.