When it comes to finding insurance for a client's business, agents have a good handle on general liability and property coverages that fit their risk exposures, business needs, and budget.

However, flood coverage hasn't always been on the radar. In the past, outside of well-known threats such as hurricanes to beach towns and rain to rivers, people believed the risk of flood damage was minuscule.

"While flooding is the most common and costly natural disaster in the United States, flood insurance is often seen as an optional purchase, and take-up rates on flood coverage are in the 20% range," Neal Schmidt, Vice President of Commercial Underwriting at Philadelphia Insurance Companies (PHLY), shared in an AM Best interview.

Many agents and clients are now finding that the risk of a flood happening and damage occurring is something they shouldn't overlook. What's changed and why?

Flooding Risk Is at an All-Time High Across the U.S.

By all estimates, flooding events will only continue to grow due to climate change and other environmental and technological factors.

• Statistics show that we have experienced a 20% increase in heavy downpours in the last 50 years
• Increasingly frequent and intense hurricanes
• Heavy spring rains combine with snow and ice melting that can lead to unexpected flooding
• Flash floods can occur in densely populated areas with many structures and paved roads that keep rain from being absorbed
• Even fires contribute to flooding - bare, burned-off sections of land increase runoff during heavy rains

Agents will need to provide their clients with solutions for these growing areas of flood risk. "Selling flood coverage is an opportunity for agents to differentiate themselves by serving as a resource for flood insurance and flood education," Schmidt explains.

When you realize that just an inch of water can cause $25,000 in damage, it's suddenly clear how expensive it is for organizations to leave this risk uncovered. At PHLY, we've kept a close eye on this serious problem to make sure we have the right solutions for every need.

3 Things to Know About Flood Insurance and the PHLY Difference

Through careful development, pricing, and underwriting, we're able to offer standalone flood insurance through two insurance opportunities at PHLY: commercial primary and commercial excess coverages. We are also a WYO (write your own) provider for the National Flood Insurance Program (NFIP).

1. Commercial Primary Flood Insurance: This coverage insures flood damage to buildings, contents, and business income. It offers:

• Competitive rates
• Replacement cost loss settlement on building and contents
• Deductibles from $1,000 - $100,000 (higher deductibles available upon request)
• Maximum limits (with a total combined of $5M per building, not location)
  • Building: $5M
  • Contents: $1M
  • Business Income: $100,000
• Coverage available for high hazard flood zones
  
  

2. Commercial Excess Flood Insurance: This coverage is available on risks not subject to storm surge in a CAT 3 or less and on eligible risks that are declined for primary coverage. It offers:

• Competitive rates
• Business income coverage options
• Replacement cost coverage on buildings and contents
• Maximum limits (with a total combined of $5M per building, not location)
  • Building: $5M
  • Contents: $1M
  • Business Income: $100,000
• Deductibles up to $250,000 for habitational and $500,000 for other commercial buildings
  
  

3. National Flood Insurance Program: PHLY is an authorized Federal flood insurance writer, with flood programs available in all 50 states. NFIP offers:

• Coverage available for residential (including single or two-to-four family dwellings) or commercial buildings and contents
• Coverage that can be purchased in all flood zones
• Specialized condominium association product available
• Contents-only coverage available for renters
• A 30-day waiting period for new policies except when the building is a loan closing or map revision
  
  

"With these three programs and our ability to risk-select certain locations and use solid flood models, we can write coverages that other carriers may not be able to offer," Schmidt says. "That's why you can trust PHLY to have flood insurance options for every kind of client and need. Working with us can help agents differentiate themselves, too."

PHLY may also offer flood coverage in conjunction with property coverage and, with the PHLY Difference, we can help you provide even more value to your clients, with:

• Opportunities to speak with our underwriters to learn more about flood risk and coverage needs
• Specialized marketing and training for the NFIP programs
• Plus, a best in class claims experience, with in-house recovery and subrogation, and industry and type-of-loss specialists - and a 96% customer satisfaction rating
  
  

Talk to PHLY About Flood Risk Today

Flooding can occur anytime and anywhere, often outside of historic flood areas because of the effects of climate change and other man-made and natural changes. Make sure your clients understand the damages their businesses may face from this growing, unexpected exposure.

We can help with our three flexible coverage options. Talk to your PHLY rep today to learn more about the benefits of flood coverage and prepare your clients for this ever-present risk.