Being a small business owner can be as challenging as it is rewarding. Among the many questions you’ll have to answer as an entrepreneur is how to protect your property best. That’s where having the right insurance comes in.

Business owners who operate a storefront or office often overlook one safeguard: commercial flood insurance. You’ll probably need this policy to protect your property during a natural disaster, because most commercial property insurance policies don’t cover a business loss from a devastating flood. 

What is commercial flood insurance? 

The International Risk Management Institute (IRMI) defines flood coverage as a policy that pays for the cost of property damage caused by a flood.1 And if you think your commercial property insurance already covers flood damage, think again. According to the Insurance Information Institute (III), flood damage caused by a storm surge or another kind of flood damage isn’t included within the standard property section of commercial policies like a commercial package policy (CPP) or a business owner’s policy (BOP).2

Flood policies can be purchased either through private insurers or the National Flood Insurance Program (NFIP), a government program that provides insurance to help people financially withstand floods. Commercial flood insurance can cover a maximum of $500,000 worth of damage in building coverage and the same amount for contents coverage. And don’t worry about shopping around too much. The NFIP regulates flood insurance prices so that the cost won’t differ from one insurer to the next.3

Though you won’t have to worry about comparing premiums, you don’t want to wait to purchase commercial flood insurance. There’s usually a 30-day waiting period before your NFIP commercial insurance policy takes hold, according to FEMA.4 The government does this so that people can’t buy flood insurance just because they know a flood will happen in the next few days—a practice discouraged in the insurance industry.

What does commercial flood insurance cover?

Before settling on a policy, you’ll need to consider just how much coverage is suitable for your situation. If a standard policy doesn’t apply to everything you want to be covered, you could add additional coverage. According to the III, flood insurance generally covers building and inventory damage stemming from:

  • Water overflowing from rivers or streams
  • Heavy rains or prolonged rain
  • Storm surges 
  • Blocked storm drains
  • Snowmelt
  • Broken dams or levees
  • Mold or mildew resulting from the flood.

Most insurance companies define floods as waters that cover two acres or affect two properties at a minimum. However, if the water comes from above (think rain or melting snow overflowing the gutters and leaking onto your property), your commercial property insurance will likely cover the damage.5

What doesn’t commercial flood insurance cover? 

Sure, prolonged heavy rains or the aftermath of a heavy snowstorm could damage your workplace and merchandise, but that doesn’t mean your commercial flood insurance policy will cover every item affected. The III points out that this coverage may leave out:

  • Landscaping 
  • Septic systems 
  • Business vehicles (unless you choose to add them in the “comprehensive” portion of your business vehicle policy)
  • Financial losses caused by business disruption (unless you buy excess coverage)
  • Loss of use of the policyholder’s property 

Generally, if a flood damages property or systems away from your described business location, your commercial flood insurance generally will not cover it. 

Does my business need commercial flood insurance? 

Perhaps. The answer to that question depends on several critical factors: your business location, the regulator that oversees your mortgage company and your budget.6

You may be required to purchase flood insurance in a few cases: 

  • If your business is located in a flood zone, or
  • if your mortgage lender is insured or regulated by the U.S government.7

But even if that’s not the case, flood insurance could be worth the investment, because you never know if a natural disaster will come and upend your place of business. 

Furthermore, climate change is contributing to changing precipitation patterns around the world, which means the U.S. could see more floods and severe storms in the future.8 There are a few things you’ll need to consider before obtaining a flood policy for your business.

How do you determine your business’ flood risk level? 

When assessing whether your business could be at risk for flooding, you need to determine whether your business is located in or near a flood zone. You can find out where flood zones are located in your locale using the FEMA Flood Map Service Center.

However, flood maps are not often revised, so the published map may not accurately reflect the flood risk of your location. 10That said, you may need flood insurance even if your business isn’t situated in a designated flood zone, because a flood could affect your property and you need to be prepared in advance.

It’s also important to note where your merchandise, equipment or other commercial property is located. According to the III, if there is any part of your office space or storefront that is housed on a lower floor, items on that level are vulnerable to floods.

Commercial flood insurance vs. standard commercial insurance

Part of being your own boss means wading through the jargon to figure out what’s best for your business. Here’s the difference between standard commercial insurance and commercial flood insurance:

  • Commercial property insurance: This policy safeguards businesses and other organizations from damage to their buildings and contents stemming from an included cause of loss.11
  • Commercial flood insurance: Because almost basic property insurance policies don’t cover floods, commercial flood insurance can be purchased as a separate policy or sometimes as an endorsement to your existing policy. Business owners can also buy this policy directly through the NFIP.12

Protect your small business with flood insurance

Don’t wait until you hear about a forthcoming storm to prepare. Make sure you:

  • Check to see if your mortgage company or the federal government requires you to get coverage
  • Buy your commercial flood insurance in advance

At Thimble, we want to make insurance easy, so business owners like you can focus on what’s important — growing your business.

Besides commercial flood insurance, you’ll probably need general liability insurance and Business Equipment Protection to protect your small business from risks other than heavy rain and snowmelt. 

Even if you are a company of one, general liability insurance is totally worth it if you accidentally damage someone else’s property. If you’re looking to get an insurance policy fast, we’ve created on-demand insurance, which lets you buy coverage for as long as you need.

Business Equipment Protection is a separate coverage that you can purchase. It covers accidental damage to your own business equipment, wherever you take it and is available with every Thimble monthly policy. 

You can get insured in less than 60 seconds with Thimble. Download Thimble’s mobile app, or click “Get a Quote,” answer a few quick questions about your business and you’ll get an instant quote. And if the rate works for you, click to buy. 

You’ll receive your policy and Certificate of Insurance (COI)
right away, so you can get back to work. To protect your business, rain or shine, stand under our umbrella (ella-ella).


  1. International Risk Management Institute. Flood Coverage.
  2. Insurance Information Institute. Does my business need flood insurance?
  3. Investopedia. Flood Insurance.
  4. FEMA. Flood Insurance.
  5. Insurance Information Institute. Does my business need flood insurance?
  6. The Balance. Does Your Business Need Flood Insurance?
  7. Insurance Information Institute. Does my business need flood insurance?
  8. Natural Resources Defense Council. Prepare for Flood.
  9. FEMA. FEMA Flood Map Service Center9.
  10. Scientific American. Studies Sound Alarm on “Badly Out-of-Date” FEMA Flood Maps.
  11. International Risk Management Institute. Commercial Property Policy.
  12. International Risk Management Institute. Flood Exclusion.