Doug Imholte
VP, Business Insurance Producer
Natural disasters, such as hurricanes and floods, are exposures franchise businesses shouldn’t overlook, especially in coastal areas. While business insurance policies may provide protection against many kinds of damage, standard policies can have limitations when it comes to natural disaster coverage.
Here’s what to know
- In some coastal areas, insurance carriers may limit coverage for wind, hail, and flood because of the higher catastrophe risk.
- Standard general liability and property policies typically exclude flood coverage. Flood coverage is available through the National Flood Insurance Program (NFIP) for covered direct physical loss caused by flood.
- Marsh McLennan Agency (MMA) can help you obtain flood coverage, or you can go directly to the NFIP site.
- Many business insurance policies exclude or limit wind damage from hurricanes, especially in higher-risk coastal areas.
- Business interruption/loss of business income coverage is generally triggered only when the loss results from a covered cause of loss under the policy; flood is typically excluded, and wind coverage depends on the policy.
- Wind and hail coverage may be available on a separate policy through MMA.
Best practice guidance
Before hurricane season begins, it’s important for franchise owners to understand not only what their insurance covers, but also where gaps may exist.
Our Hurricane Preparedness Checklist is a practical companion resource that can help you prepare in advance. It walks through key steps such as:
- Reviewing property insurance limits and sublimits
- Confirming whether flood is covered or excluded
- Checking business interruption terms
- Evaluating property loss control and security
- Updating business continuity plans
- Preparing claims documentation before a storm hits
You should also review your lease to determine what the landlord covers and to coordinate on a natural disaster response plan. Knowing where your coverage gaps are before a storm is half the battle — and if you are retaining risk on your balance sheet, it is better to identify that early and explore your options.
Let us help
For help determining your coverage needs and options, email the MMA Franchise service team.
