What is considered a flood?
Did you know flood coverage is specifically excluded from the standard commercial property policy?
Building and property damage from a burst pipe within a building is not considered flood damage even though significant damage has occurred. This is referred to simply as water damage. True flood damage is the result of a large amount of water flowing over land and seeping into a building through doors and windows.
Common causes of flood can include:
- Natural breach or failure of a dam
- Snowmelt runoff during Spring
- Heavy storm rainfall leading to flash floods
- Tidal flooding in coastal areas
There are three distinctive types of floods:
- River Flooding (Fluvial) —when land is covered by water (either fresh or wastewater) that has been released from a river, stream, or lake.
- Urban Flooding(Pluvial)—when infrastructure is unable to contain and drain water generated by a combination of rain, snowmelt or stormwater.
- Coastal or Storm Surge Flood—when seawater covers dry land as a result of high tides or strong winds and waves including tsunamis.
Available Flood Coverage
Where eligible, flood coverage can be purchased as an endorsement to a Commercial Property Policy. Eligibility and pricing are partially determined by where the risk is located in relation to the flood return period.
The flood return period is defined in terms of flood years which describes the estimated probability of a flood event happening in any given year:
- 10 Year Flood Zone = 10% probability
- 50 Year Flood Zone = 2% probability
- 100 Year Flood Zone = 1% probability
- 500 Year Flood Zone = 0.2% probability
For more information on available coverages and eligibility contact your Broker!
