A property insurance policy requires a property owner/manager to take all reasonable steps to minimize the effect of a loss. Is there a responsibility for the property owner/manager to take all reasonable steps before a loss occurs? Absolutely.
In order to minimize the financial loss at the time of flooding, property owners/managers should:
1 – Establish the exposure to flooding
Establish, if possible, from the information available whether the property is within a 100-year flood plain or a 500-year flood plain. Have your insurance broker provide guidance as to whether the property is exposed to a potential flood.
Consider the following scenarios:
2 – Avoid shortfalls at the time of a loss by having adequate limits:
It is essential that the following questions be reviewed on a regular basis to minimize any potential shortfall at time of loss:
3 – Extra considerations:
There are extra expenses to take into consideration after being affected by a flood that may not be covered by insurance. It is important to ask your broker what your current limits are, whether you are covered for business interruption and extra expenses and what, if any, limitations exist in the policy that will impact the amount of coverage available following a loss.
4 – Things to consider after a flood loss:
Consider the cost of removing debris after a flood loss.
Pollution clean-up as a result of the flooding:
Have any concerns? We recommend that you contact our Lenders’ Insurance Advisors to ensure you have appropriate coverage in place to protect your asset before a loss occurs.
For more information on this topic, please contact:
INTECH Risk Management (“INTECH”) is an independent insurance consulting company involved in the analysis, design, development, implementation and management of insurance programs. INTECH does not sell insurance, nor is it affiliated with any insurance company or brokerage. This unique independent position in the marketplace enables our consultants to avoid conflicts of interest and provide our clients with unbiased, expert advice. INTECH has been the 2015 and 2016 winning recipient of the IJGlobal Americas Due Diligence Provider of the Year Award.