Flood Insurance Options for Veterinarians

Flood

Floods are the most common natural disaster in the United States

Flooding can be an emotionally and financially devasting event. Today, more people file water damage claims than almost any other type of insurance claim. Nearly one in 50 homeowners file a claim to recover water damage losses annually. The number of homes and businesses damaged by water has escalated in recent years due to an increase in severe storms.

Even though floods are the most common natural disasters in the United States, most business insurance policies do not automatically cover flood damage. Many veterinary hospital owners need additional flood insurance coverage to protect their businesses.

Do you need flood insurance?

Many mortgage companies require that property owners in high-risk areas buy flood insurance. If you don’t live in a high-risk flood zone, you might think you don’t need flood insurance. However, according to the Federal Emergency Management Agency (FEMA), more than 20% of flooding claims are from people who own property in areas with low flood risk.

Flood insurance is available to any home or business owner in areas that participate in the National Flood Insurance Program (NFIP). In many areas private flood insurance may also be available which may offer lower premiums or additional coverages such as Business Income, which is not offered by NFIP policies.

What does Flood Insurance cover?

Flood insurance covers damage caused by external flooding, like a storm or overflowing lakes, oceans, rivers, and drains. The NFIP offers two types of flood insurance—building property and personal contents coverage—that you can purchase separately or together. These two areas are also covered by private flood insurance companies.

Building: Coverage protects the entire physical structure, plumbing, electrical, HVAC systems, detached garages, and attached features inside the veterinary hospital, including cabinets. NFIP Flood policies have a $500,000 maximum coverage limit on the building.
Contents: Coverage protects damage to medical equipment, furniture, inventory or any other type of business personal property. NFIP Flood policies have a $500,000 maximum coverage limit on business contents.

What is not covered?

Flood insurance is a specialized coverage focusing exclusively on the peril of flood. However, not everything related to the flood is covered by the NFIP, such as:

Business Income & Extra Expense: Just protecting your tangible assets is one thing. Protecting your loss of income is another. Flood policies from the NFIP do not cover loss of Business Income. But, there are ways to obtain that portion of coverage separately.
Cars and other vehicles: A Flood policy purchased to cover your building and contents does not extend to cars or other vehicles. This is pretty self-explanatory, but we have been asked before, so we are including it here.
Preventable water and mold damage

How can Business Income & Extra Expense for flooding be covered?

Private Flood Insurance: Some private flood insurance companies include Business Income as a coverage in their policies. To see if you qualify, call us directly.
Excess Flood Insurance: While typically the most expensive path to include Business Income in your flood protection is to have an excess flood policy. If your primary flood policy is through the NFIP, an excess flood policy can be used as an additional policy to supplement your NFIP flood policy. Excess flood policies can include Business Income.

The easiest or best way to get Business Income & Extra Expense to engage when there is a flood is to have a Business-Owner Policy (BOP) include flood as a covered peril. But, most of the insurers you would want to protect your business are not always that excited about providing flood or simply do not offer it as an option. But there are some other methods to consider: