Most people associate floods with catastrophic events such as hurricanes and cyclones. Hurricanes caused billions of dollars in property damage, displacement of people, and fatalities but in reality, less catastrophic events cause floods.
A few inches of standing water can wreak havoc on your business. In addition, flooding can happen anywhere, anytime. In fact, 20% of flood insurance claims come from properties in low-risk flood zones. Apart from rainfall, snowmelt, hurricanes, and new developments in your region can cause flooding.
By and large, floods can cause huge damages and losses. FEMA reports that the average cost of a commercial flood claim is $90,000. Without insurance, you have to incur these costs or risk closure. Research shows that 40% of small businesses affected by floods do not reopen.
Luckily, you can reduce the impact of flooding on your business with a flood insurance policy. This article explains why your company needs flood insurance in Las Vegas. It outlines the benefits of flood insurance and frequently asked questions on commercial flood insurance.
Floods in Las Vegas?
You may think that there are no floods in a city located in the Mojave Desert. Although this may be relatively true, seeing as Las Vegas only receives 4.1 inches of rainfall annually, there’s more to it. The minimal rain in the city takes the form of sudden, violent thunderstorms that result in dangerous flash flooding. Remarkably, since the Las Vegas region is at a lower elevation, it is susceptible to running water from storms in surrounding areas.
Although flooding can take place anytime, July through September is the flash flood season. In 1999, Las Vegas experienced the worst flooding in recent years, causing two fatalities, destruction of property, and displacement of people. One research shows that the flood destroyed 20.5 million worth of public property.
It is clear that like many cities around the US, Las Vegas is susceptible to flooding. Therefore, businesses must invest in flood insurance to guard against the effects of floods. The National Flood Insurance Program (NFIP) offers flood coverage for enterprises to protect against flood-related property damage.
Benefits of Flood Insurance for Companies
Flood insurance offers numerous advantages for B2B companies including:
- Compensates for losses: Flood insurance protects your business’ assets and physical contents like furniture, floors, walls, equipment, and inventory. In case of damage, you will be compensated for all losses included in the policy.
- Peace of mind: in the wake of severe weather, flood insurance gives you peace of mind. You are assured that regardless of how things turn up, your business is protected. You don’t have to worry about incurring huge losses after flood-related damage.
- No payback required: Relief offered by the federal government during disasters is repaid as a loan by the beneficiary. However, with insurance, you don’t have to refund the amount you are compensated. You pay your premiums, and your insurance provider caters to the rest.
Frequently Asked Questions on flood Insurance for Businesses
1. Does Commercial Property Insurance Cover Flood Damage?
No. Most commercial property insurance policies in Las Vegas, Nevada, do not cover flood damage. You must take a separate flood coverage.
2. What Is Covered In Flood Insurance
Flood insurance covers flood-related damage to your building and its contents. This includes any losses from heavy rains, snowmelt, storm surge, broken dams, overflowing rivers, and blocked storm drainage systems.
3. What Is Not Covered By Flood Insurance?
A typical flood insurance coverage in Las Vegas will not cover property outside the building, such as business vehicles – you can have comprehensive car insurance to cover this. Also, it does not cover financial loss caused by business interruption.
4. Is Flood Insurance Mandatory?
No. However, if your business is located in a high-risk flood area, and you have a mortgage, you must purchase flood insurance.
5. How Do I Assess My Risk For Flood Damage?
When determining your risk for flood damage, location is the primary factor to consider. Is your business situated in or near a flood zone? A flood zone can be a coastal area, near a river or lake, and on the path of run-off water. Also, the part of a building that hosts your equipment and inventory determines your risk. If they are housed on a lower floor, the risk of flood damage is higher.
If your company is located in a flood-prone area, consider flood insurance if:
- Your local area has cold, snowy winters and warm springs. The fast melting of snow can cause flooding.
- Your business is located in a locality with moderate rainfall. Moderate rainfall does not mean you are immune to flooding. A drain near your business premises may flood, resulting in flood damage.
6. Does Flood Insurance Cover Mold?
Mold damage is only covered if it is the aftermath of a flood. However, the coverage differs from case to case. Mold that existed before flood damage is not covered.
7. How Much Compensation Does Flood Insurance Offer?
You can expect up to $500,000 for your building and $500,000 for its contents.
8. Where Do I Purchase Flood Insurance?
Well, that’s where we come in. You can purchase insurance from us at a rather affordable rate.
9. How Much Will I Pay For A Commercial Flood Policy?
The amount you pay for a flood policy depends on factors such as:
- The building’s location
- Building’s height
- Building’s use
- Your business location in the building
- Eligibility for premium discounts
- Location of business property –is it above or below base flood elevation.
10. Does Flood Insurance Have Any Waiting Time?
Yes. You have to wait for 30 days from the day you purchase your policy for it to take effect. Hence, you can’t wait until a storm is coming to buy a policy.
Bottom Line
Flood insurance protects one of your most valuable investments, your business, from flood damage. Floods are the most prominent natural disaster. They strike anytime, anywhere destroying buildings, equipment, machinery, and inventory. As a Las Vegas businesses owner, you cannot afford to take flood insurance as an option. The ever-changing weather conditions and Las Vegas vulnerability to flash floods makes flood insurance a must-have for all businesses.