Schools face unique property damage risks when flood waters rise. Everything from the basement to the roof can be ruined in a matter of hours, causing losses long after the waters have receded. Attorney Bill Voss explores coverage for different types of water damage, problems with commercial flood damage policies, and optional endorsements that can strengthen a property damage policy against flood losses.
Flood Coverage Options for Schools and Universities
Flood coverage varies not only by the selections on a private policy, but also the cause and source of the flooding. For example, flooding caused by hurricanes or rising tides is usually not covered under commercial insurance policies. School administrators will have to secure a separate property damage policy through the National Flood Insurance Program (NFIP) to protect against flooding from natural disasters.
A commercial insurer may pay for water damage if you have certain endorsements on your policy, including:
- High-value equipment. Most property insurance policies place limits on the dollar amount of coverage and can exclude certain high-value items, such as computers, auto and tech labs, and multimedia displays. A policy extension for specialty equipment may carry an extra deductible, but could be worth it if your institution relies on high-tech machinery, security systems, and other hard-to-replace items.
- Code upgrade costs. If the damage to your walls and foundation requires rebuilding, you will have to construct the new property so that it is compliant with modern building ordinances. If the building is significantly out-of-date, the cost to bring it up to code could double or triple costs of construction. Code upgrade coverage can pay for the costs of new plumbing, wiring, insulation, and design required by current building ordinances.
- Commercial auto losses. Flooding can ruin fleets of buses as well as staff and faculty vehicles—and your liability policy isn’t going to cover non-collision damage. Comprehensive coverage will pay to repair or replace vehicles that have suffered weather-related damage, and it may also offset the costs of renting staff and student transportation until your vehicles have been repaired.
- Service interruptions. Flooding can interrupt businesses and services across multiple counties, causing the loss of vital services such as phone, internet, and electricity. Service interruption insurance can pay for losses caused by power outages, including loss of perishable items, and cleanup of biohazards due to loss of waste disposal services.
- Property in transit. Your offsite property may be stalled in transit or washed away completely due to flooding, and these items may not be covered if they were away from your primary business location. Inland marine insurance, also called "floating" property insurance, can pay to replace school property that is on the move, such as new computers, office supplies, plants, decorations, or building materials for a new addition to the property.
- Special event losses. If your school frequently hosts special events (such as academic tournaments, sporting championships, concerts, proms, graduations, or fundraisers), seasonal business insurance can replace the revenue that was lost due to cancelation or rescheduling.
- Lost business income. All commercial operations need business income insurance, and schools are no exception. Business interruption coverage replaces up to six months of lost profits after a covered event, allowing you to continue paying teacher and staff salaries, open a temporary learning location, or implement online classrooms to prevent students from falling behind. Business income coverage can also be combined with extensions such as extra expense coverage and umbrella insurance to can provide additional funds above and beyond policy limits.
If you are having trouble getting the insurance coverage you paid for after a flood, the Voss Law Firm can help. Simply fill out the form on this page to get your questions answered by one of our experienced insurance claims attorneys, or learn more about filing a claim in our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.