Business or Landlord: Who Buys Commercial Flood Insurance?

Updated: Dec 23, 2021

Flooding is the most common natural disaster in the United States, and if you are a business owner who leases a property, you may be wondering if your business is protected in the event of a flood. Conversely, if you are a building owner, is it your responsibility to get flood insurance? Who is ultimately responsible for securing a commercial flood insurance policy, the business owner or the landlord?

In most cases, the landlord purchases a flood insurance policy to protect their building. In fact, landlords who own commercial buildings in designated flood zones and have a mortgage from a federally regulated or insured lender are required to obtain a flood insurance policy in the amount of the mortgage, up to $500,000. But they can pass those costs down to the lessee. Commercial tenants should read their leases carefully to understand their obligations. Even if the landlord has a flood insurance policy, it likely only covers their interests. What about a business owner’s contents and machinery? These responsibilities often fall to the tenant.

It is important to know that the peril of flood is excluded in most standard business owner and commercial property insurance policies. Before leasing a property, business owners should determine if the property is in a flood zone. Then, they should check with their landlord to ensure that the property has flood insurance, and clarify if they are expected to cover the expenses.

Further, if a commercial property is not in an official Special Flood Hazard Area designated by FEMA, business owners may wish to get a second opinion with a private flood insurance specialist regarding the property’s flood risk, as many of FEMA’s maps can be significantly outdated. In fact, First Street Foundation reported that 5.9 million properties in the U.S. were at substantial risk of flooding but were not included in FEMA’s 100 year flood zone. So, if you’re in doubt, reach out! Our flood experts will be happy to consult with you.

Whether you're a landlord or business owner, getting a flood quote from FloodPrice is easy and fast! We are able to customize a commercial flood insurance policy with coverage up to $5 million, and we offer a fair rate based on a more accurate risk assessment. Quoting a commercial flood policy can be more complicated than a residential policy, so our online quoting tool does not evaluate enough information to provide a quote. However, we are eager to help you determine your risk, so we encourage you to give us a call at 866-503-5663, or email us at It takes only minutes to get a quote that will help you protect your property and business equipment.

We are here to help! A little research on flood risk and flood insurance could save you thousands in the event of an unexpected disaster.

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