Munich Reinsurance America, Inc., a subsidiary of reinsurance giant Munich Re, has launched a new U.S commercial inland flood product aimed at small businesses and habitational properties located in low-to-moderate flood zones.
Hurricane Harvey flooding in Houston – Photo from ABC News
The endorsement offers insurance protection for the building, contents (including business property in a basement), business interruption/extra expense, the costs associated with moving property to safety and debris removal, and coverage is also available on a replacement cost or actual cash value basis.
The reinsurer explains that flood-induced sewer backup or overflow is also covered, so long as it occurs within 72 hours after the flood recedes.
For buildings, limits of $250,000 are available, which is the same for content, and the reinsurer explains that $50,000 is available for business income/extra expenses per occurrence and in the aggregate.
A recent survey of 157 insurance agents by Munich Re found nearly 100% of commercial policyholders with business income of less than $250,000 had no flood coverage.
Additionally, according to the Federal Emergency Management Agency (FEMA), almost 40% of small businesses never reopen their doors after a disaster.
The endorsement can be attached to a business owners or commercial property insurance policy purchased through a participating insurance carrier.
“The risk of flood has greatly increased as intense and frequent rain storms have caused the overflow of rivers, streams and other bodies of water in areas that previously were untouched by flooding,” explained Sanjay Mehrotra, Strategic Products Operations Manager of Munich Re.
“As a result, businesses located outside of Special Flood Hazard Areas or 100-year flood zones are now at risk of experiencing a flood event. Munich Re’s new U.S commercial inland flood endorsement is an affordable option to help protect small businesses and habitational properties from such events.”
Munich Re’s commercial inland flood endorsement is available throughout the United States with the exception of Florida, Louisiana, Hawaii, Alaska, and Puerto Rico.
“No one likes to think that they need flood insurance,” added Mehrotra, “but today every business owner should be considering this protection.”
The devastating impacts of 2017 catastrophe events, including hurricanes Harvey, Irma, and Maria, highlighted the widespread underinsurance of flood risks across the U.S.
