INSURANCE FAQs
FLOOD INSURANCE
FOR SMALL BUSINESS OWNERS
Q. I HAVE ALWAYS HEARD THAT
FLOOD INSURANCE IS VERY
EXPENSIVE, IS THAT TRUE?
A. The amount you will pay for flood
insurance will depend on your risk. If
your business is located in a high-risk
area, you will pay more than a business
that is in a moderate to low-risk area.
Talk to your community’s floodplain
manager to find out your property’s level
of risk. In addition, your premiums are
based on the elevation of the structure
as well as the deductible you select.
Q. AS A SMALL BUSINESS OWNER,
SHOULD I CONSIDER BUYING FLOOD
INSURANCE?
A. If your business could be damaged by rising
water, you should consider buying flood
insurance. Even if your business is not
designated as a Special Flood Hazard Area by
FEMA, it may be at risk for flooding. Talk to a
trusted insurance advisor about your options.
800-492-6116 Toll-free
insurance.maryland.gov
Q. I OWN A SMALL BUSINESS BUT
IT IS NOT IN A FLOOD ZONE. WHY
SHOULD I SPEND THE MONEY ON
A FLOOD INSURANCE POLICY?
A. Flooding is the nation’s most common
and costly natural disaster. It causes
billions of dollars in damage each year.
Floods can happen anywhere. More than
20% of flood claims come from
properties outside of the high-risk flood
zone. You should at least investigate and
make an informed decision.
Q. WHAT DOES FLOOD INSURANCE COVER?
A. Your policy terms will dictate what is covered should you incur damage from a flood.
Typically it covers damage caused by a general and temporary condition of partial or
complete inundation of two or more acres of normally dry land or of two or more
properties from the overflow of inland or tidal waters; unusual and rapid accumulation or
runoff of surface waters from any source; mudflow or collapse or subsidence of land along
the shore of a lake or similar body of water as a result of erosion or undermining caused by
waves or currents of water exceeding anticipated cyclical levels that result in a flood.
Q. HOW DO I PURCHASE FLOOD INSURANCE?
A. You should talk with a trusted insurance advisor Three options are available to business
owners for flood insurance. The National Flood Insurance Program (NFIP) offers a policy of up
to $500,000 for the structure and $500,000 for contents. Some private insurance companies
offer a commercial policy. Finally, you may also purchase a policy from a surplus lines carrier if
you are unable to purchase a policy from an admitted carrier.
Q. WHAT IS A SURPLUS LINES CARRIER?
A. These are companies that write insurance policies for risks where coverage is not otherwise
available. The Maryland Insurance Administration has very limited jurisdiction over these
policies.
Q. HOW LONG WILL IT TAKE FOR MY POLICY TO BE EFFECTIVE?
A. Normally there is a 30-day waiting period for the policy to be effective. There is an
exception if the purchase of flood insurance is in connection with extending or renewing a
mortgage loan.
To find out more about the NFIP policy for businesses, go to:
https://insurance.maryland.gov/Consumer/Documents/publications/FEMA-HFIAA-
BusinessOwner-FloodInsurance.pdf
To find out more about Commercial Insurance go to:
https://insurance.maryland.gov/Consumer/Documents/publications/commercialinsurance.pdf
INSURANCE FAQS -
FLOOD INSURANCE FOR SMALL BUSINESS OWNERS
This consumer guide should be used for educational purposes only. It is not intended to provide legal advice or opinions regarding coverage under a specific
insurance policy or contract; nor should it be construed as an endorsement of any product, service, person, or organization mentioned in this guide. Please
note that policy terms vary based on the particular insurer and you should contact your insurer or insurance producer (agent or broker) for more information.
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For more information on flood
insurance, visit our website:
https://qrco.de/floodinsurance
