Interest among businesses in purchasing flood insurance coverage from the National Flood Insurance Program (NFIP) is increasing in the wake of Superstorm Sandy’s heavy rain, record storm surge, and resulting widespread flood damage, according to Marsh.
Although most companies purchase commercial flood insurance through the private market, more are now inquiring about purchasing additional coverage through the NFIP. When used in tandem, NFIP coverage can mitigate or “buy down” large deductibles associated with commercial flood policies or simply provide additional coverage.
Under the NFIP, non-residential businesses can purchase up to $500,000 in building and $500,000 in content coverage, while residential businesses can purchase up to $250,000 in building and $100,000 in content coverage. Marsh’s Flood Service Center can place up to $30 million in excess of NFIP flood insurance, including business interruption, with A-rated insurance capacity.
“NFIP coverage and commercial flood insurance policies are complementary in that they can be structured to work in concert with one another,” said Duncan Ellis, Marsh’s US Property Practice Leader. “That said, many businesses rely solely on the commercial marketplace and do not purchase additional coverage through the NFIP, despite the widespread availability and relatively inexpensive cost. Given the massive flooding from Sandy, businesses appear to be re-thinking their approach to flood coverage.”
“We are seeing an uptick in the number of calls inquiring about NFIP coverage since the storm,” said Patrice Collingwood, leader of Marsh’s Flood Service Center, which specializes in placing NFIP coverage. “By purchasing NFIP coverage in addition to commercial flood, companies impacted by a flooding event can direct moneys that would otherwise be set aside to pay for deductibles toward other recovery efforts.”
Marsh, a global leader in insurance broking and risk management, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has approximately 26,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in human resource consulting and related services; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc.