Why B.C. Businesses Need Sewer Backup and Overland Flood Insurance

June 24, 2024

Extreme weather events can wreak havoc on businesses in British Columbia, damaging property and disrupting operations. Is your business protected with sewer backup and overland flood insurance? How about earthquake insurance?

Small business owners, especially those in flood-prone areas, need to double-check their commercial property policy, to find out whether it includes coverage for flood damage. It may be excluded in a standard policy.

Risks of sewer backup and overland flooding

Heavy rainfall, melting snow, and storms can overwhelm drainage systems, leading to sewer backups and overland flooding. B.C. businesses located in flood-prone areas or areas with aging infrastructure are at risk, and the risk is likely to increase over time.

Aside from basic flooding, sewer backups also occur when the municipal sewer system becomes overloaded and sewage flows back into buildings through drains and toilets, causing extensive damage to property, from structural damage and contamination to loss of inventory or equipment.

Whether your business experiences overland flooding or a sewage back up, it’ll require costly repairs, cleanup, and business interruption to get back on track. Businesses may also face additional expenses such as temporary relocation costs, regulatory fines for environmental contamination, and even legal liabilities from third-party claims.

Earthquake insurance for your business

Earthquake coverage can also be purchased for your British Columbia business.

Just like coverage for your home, it protects you from losses due to damaged property and contents.

In Canada, most standard commercial property insurance policies do not automatically cover sewer backup and overland flooding. Coverage is often offered as an optional add-on. Are you sure your B.C. business is covered?

Sewer backup insurance and overland flood insurance for businesses

Sewer backup insurance specifically provides protection against damages caused by sewage backup into a building, including cleanup costs, repair of damaged property, and replacement of contaminated items.

Overland flood insurance, on the other hand, covers damages resulting from water entering a building from outside due to excessive rainfall, overflowing rivers, or melting snow. Make sure you are covered for both types!

While some business owners may perceive sewer backup and overland flood insurance as unnecessary expenses, the reality is that the cost of coverage pales in comparison to the potential losses incurred from a flood-related incident.

Does my business insurance meet lender or regulatory requirements?

In addition to protecting their financial interests, businesses may also be required to obtain sewer backup insurance and overland flood insurance to comply with lender or regulatory requirements.

Financial institutions sometimes mandate certain insurance coverage as a condition for providing loans or mortgages, especially for properties located in high-risk flood zones.

Similarly, regulatory authorities often impose insurance requirements as part of building codes or environmental regulations to mitigate the impacts of flooding on public safety and the environment.

Make sure that your British Columbia business is financially protected from a sewer backup, overland flooding, and an earthquake.