Disaster Preparedness 101: Flood Insurance

Most bookstores will never have to deal with the severe flooding experienced by several booksellers on the East Coast this hurricane season, or the tragedy that was Hurricane Katrina. But for those in high-risk areas [1], the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program [2] (NFIP) offers coverage provided by national carriers that can be purchased through LIBRIS, the ABA insurance company, or another licensed broker.

Since almost 40 percent of small businesses never reopen their doors following a disaster due to tens of thousands of dollars in damage caused by just a few inches of water, FEMA encourages business owners to explore the options available to them at the NFIP website, FloodSmart.gov [3].

Their statistics show that over the past five years (2006 - 2010), the average commercial flood claim amounted to just over $85,000, while the average flood insurance policy cost about $600 per year.

Commercial flood insurance policies cover physical damage to the policyholder’s property and possessions. Below is a general guide from NFIP outlining what’s covered:

Building Property

• The insured building and its foundation
• Electrical and plumbing systems
• Central air conditioning equipment, furnaces, and water heaters
• Refrigerators, cooking stoves, and built-in appliances such as dishwashers
• Permanently installed carpeting over unfinished flooring
• Permanently installed paneling, wallboard, bookcases, and cabinets
• Window blinds
• Detached garages (up to 10 percent of Building Property coverage)
• Detached buildings (other than garages) require a separate Building Property policy
• Debris removal

Personal Contents Property

• Personal belongings, such as clothing, furniture, and electronic equipment
• Curtains
• Portable and window air conditioners
• Portable microwave ovens and portable dishwashers
• Carpets not included in building coverage
• Clothing washers and dryers
• Food freezers and the food in them
• Certain valuable items such as original artwork and furs (up to $2,500)

Flood insurance is the best way to protect a business from devastating financial loss. FloodSmart.gov [3] provides information about flood risks, the National Flood Insurance Program, residential and commercial coverage, and preparation for and recovery from a disaster.

Booksellers in ABA’s LIBRIS insurance program who are interested in getting a quote for flood insurance should contact Dirk Hanket of Beecher Carlson at (303) 996-5442 or dhanket@beechercarlson.com [4]. A list of participating insurance companies is also listed on FEMA’s website [5].