As victims of Hurricane Harvey try to assess their (often catastrophic) damages, many business owners are finding that their traditional coverages do not adequately cover the scope of their losses. The National Flood Insurance Program (“NFIP”), the primary governmental flood insurance option, has traditionally provided adequate coverage for homeowners, but often does not provide the necessary protection for small businesses. As currently being reported in multiple news outlets, the maximum coverage for many business owners is limited to $500,000 for physical property damage, with no coverage at all for losses in connection with their temporary suspension of business.
Currently, there are efforts to revise the NFIP program, which has remained largely unchanged since the 1970s, to include business-interruption coverage. However, business interruption insurance is available through the private market, and Harvey’s devastation is certain to bring attention to such coverage as business owners around the country struggle with the reality of what can happen when perils shut down the ability to generate revenue for an extended period of time.