How Your Business Can Prepare and Deal with a Flood

How Your Business Can Prepare and Deal with a Flood

August 21, 2024 / 5 mins read

For your small business in Toronto, flooding can be devastating. It can cause major damage, business interruption, and health and safety risks. It’s stressful, to say the least. How does your commercial insurance protect your Toronto business in case of a flood?

Floods are one of the most common and costly disasters in Canada in terms of property damage. How can you prepare your business for a flood?

Wherever your business is located in Toronto, Greater Toronto Area (GTA) or anywhere in Ontario, your Western Financial Group business insurance expert will give you top-notch commercial insurance advice and ways to save on insurance for your business. We are business insurance experts.

How your Toronto business can prepare and deal with a flood

When you understand your commercial property insurance, what it covers, and take measures to prepare for a flood, you will be protecting your Toronto business and your employees.

Flood coverage is included with most small business insurance package policies, but you should always double check that the coverage is provided. In cases where the business is located in a flood zone, insurers may decline to provide the coverage.

Remember that commercial property insurance also helps cover repair or replacement costs if your Toronto business’s property is damaged or destroyed due to a covered loss, such fire, theft, storms including wind and hail, or vandalism.

How insurance can protect your Toronto business from flooding

Here’s what you can do to provide more protection to your Toronto business from flooding:

Overland flood coverage is available as an add-on insurance coverage. This type of insurance provides protection for loss or damage related to water entering a property from a sudden accumulation of water. This usually results from heavy rain, spring run-off, or overflow from lakes or rivers. If you don’t have this add-on, you may not be covered.

Sewer backup coverage: This add-on coverage (also called an endorsement) helps protect your Toronto small business against water damage from sewer backups.

This type of add-on insurance typically covers:

  • Backup from a sewer, storm drain, or septic tank
  • Incidental damage caused by sewer backups, which includes coverage for the cost of professional cleaning or replacing walls, flooring, furniture, and other belongings
  • Overflow from a sump pump or other similar equipment.

It’s important to understand that sewer backup insurance does not cover every type of water damage insurance claim.

Add business interruption insurance: This coverage supports you when your Toronto business can’t operate due to a covered loss.

There are a number of losses that can force your Toronto business to shut down. Some examples include:

  • Damage to your equipment from fire or vandalism
  • A major reduction in revenue due to a client/supplier facing losses of their own
  • A disruption in your supply chain

Business interruption insurance can help with expenses such as:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

Business interruption insurance can be the difference between recovering from a loss and closing permanently after a flood.

How much does overland flood insurance and sewer backup insurance cost?

There isn’t a set price for either type of coverage because all businesses have different needs and requirements.

Factors that are usually taken into consideration are:

  • Your location
  • Type of business
  • Its size and number of employees
  • Annual revenue
  • Any past claims, in particular flooding
  • Are you located in a flood zone?

Consider what you may need to spend on your business to recover from a flood without adequate insurance coverage. Is that a risk you can afford?

What factors can contribute to the flooding of your Toronto business?

Old infrastructure

Heavy rainfall can impact old infrastructure, which might not be able to handle heavy rainfall and its runoff. An old and inundated sewer system can cause water to back up through floor drains or basement fixtures, causing flooding in your business.

Your Toronto business’s location

Are you in an area that is known for flooding during heavy rains?

What type of building is your Toronto business in? Older buildings may not have appropriate drainage or the ability to withstand flooding.

How your Toronto business can prepare for a flood

  1. Make sure your business has the right insurance coverage to protect against flooding.
  2. Have your insurance provider’s number handy.
  3. Keep an emergency flood kit with a flashlight, battery-operated radio, first-aid kit, plastic sheeting, sandbags, blanket, and copies of your insurance and important phone numbers.
  4. Have an employee contact list.
  5. Watertight walls: You may build watertight walls around equipment or work areas within your business that could be susceptible to water damage.
  6. Retrofit old windows so that they are watertight.
  7. Install backflow prevention check valves: This can help prevent chemicals, toxins, and debris from making their way back into a clean water supply or possibly coming up through drains and appliances.

Here’s an insurance checklist for Toronto businesses:

  • Do you have the best Toronto business insurance rate that suits your work?
  • Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
  • Are you or your employees using personal vehicles for work?

What do I do if there’s a claim against my Toronto business?

  • Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
  • Know your policy so that when you contact your broker you are familiar with what will be covered or not.
  • Document the damage. Take photos right away and write down what happened.
  • Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
  • Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
  • Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get you the right insurance to protect your Toronto business against flooding. Our experts are available now to help you navigate the business insurance journey.

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