|The following is an excerpt taken from the article, “3 Types of Insurance You May Think You Have But Don’t”. For more information please visit www.sba.gov.|
Water damage is the most common type of property damage for commercial buildings businesses, according to some insurance companies. But there’s water damage, and then there’s water damage. Some types of water damage are covered by your business owner’s policy (BOP), but others are not.
- What’s usually covered: BOP’s typically limit coverage to water damage from within. This means damage that results from freezing pipes, broken pipes or other accidents causing water to be inside your facility.
- What’s usually not covered: BOP’s typically don’t cover water damage from without (outside your building or under the foundation). This can result from flooding (e.g., from storms, snow melts), water main breaks, or sewer backup.
You can obtain coverage for water damage that ordinarily is not part of your BOP. This can be done in some cases simply by extending the coverage of your basic policy.
However, if your business is located within a flood zone, the only way to obtain coverage is with a separate flood insurance policy from the federal government (not a private insurer). The cost of coverage depends on where your business is located (the closer to a serious flood area, the higher the premiums). Find more about this coverage through the National Flood Insurance Program.