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Insurance and Mold: What Does Flood and Premise Liability Insurance Cover?

Whether you own your home, own your business, or are a real estate investor, having adequate insurance policies in place is a must. These policies, while occasionally costly, can help save you significant amounts of money if your property is damaged by fire, natural disasters, water, or any other potential issues.

As a business owner, you not only need to have those insurance policies in place, but you're also required to have workers' compensation and other protective measures. While many of those policies are rather easy to understand, there are some others that leave policyholders with questions. If you own your own business, it's vital that you understand what your flood and premise liability insurance policies protect you against.

Obviously, different insurance companies provide coverage that protects policyholders against different things. The policy that you are paying for may not be the same as the person who owns the business down the street from you. Since there is no way to determine every intricacy of your individual policy, we will discuss some industry norms for premise liability insurance and flood insurance policies. Knowing what you’re protected against can help you in the event of any mishaps at your business.

What is Premise Liability Insurance?

The term “premise liability” describes the financial responsibility of a property owner regarding injuries that happen on their property resulting from a dangerous condition. As a business owner, you probably think about this term in relation to areas in your facility where an employee, customer, or client may slip and fall. For example, if you have a leak in your roof that results in a puddle of water on the floor and a client slips and falls in that puddle, your premise liability insurance would help cover the cost of the individual’s injury. There are several other examples of premise liability insurance coverage, but the slip-and-fall example gives you a good idea of how it works.

Other incidents that are generally covered by premise liability insurance include:

• Broken sidewalks, flooring, or stairs

• Accidents on an escalator or in an elevator

• Lack of security that leads to injury or assault

• Snow and ice in your parking lot

• Dog bites

• Hidden extension cords

• Falling signs or merchandise

Virtually every premise liability insurance policy provides coverage for the cost of any third-party injuries and damage claims that relate to your business. It is important to understand that premise liability insurance does not cover you against advertising injury. Advertising injury refers to non-physical injuries such as copywrite infringement, slander, libel, or a piece of published information. Even if these instances take place at your business, your premise liability insurance does not cover it.

There is a lot of debate about whether premise liability insurance covers the cost of mold exposure; unfortunately, there are not a lot of black and white answers. While it can be debated that a customer or client isn't in your facility long enough to suffer from the effects of mold, there is nothing prohibiting a customer or client from pursuing financial reimbursement for damage suffered due to mold exposure. This is an example of something that you will need to look into your premise liability insurance policy to determine.

What Does Flood Insurance Cover?

Commercial flood insurance is a must-have for business owners, especially those who own a commercial facility in an area prone to flooding. Flood insurance protects you against a host of financial issues that result from a flood. For instance, if you have commercial flood insurance for your business, you are covered if your building suffers any flood damage. This includes damage to floors, drywall, ceilings, electrical systems, and your facility's heating and cooling system.

It is vital to understand that flood insurance does not include water damage that results from a plumbing emergency. For example, if a hot water tank in your facility malfunctions, resulting in damage to the floor around it or any other items, flood insurance does not cover that. While you may say that the area is flooded, this will be covered by your standard property insurance. Flood insurance only covers floods that are the result of a weather event.

What Should Business Owners Do?

As a business owner, you are ultimately responsible for everything that goes on. Even if you have trusted managers in place to oversee the daily operations of your business, the buck stops with you. One of the most important aspects of owning a business is having insurance policies in place that will protect you and your business from any financial loss related to an injury or flood.

Having premise liability insurance is a must. It's a good idea to find a policy that covers mold exposure, but there are other steps that you can take. Be vigilant about looking for signs of mold in your facility. You don't have to be a professional mold inspector to do this. A strong, musty odor in your facility is one of the most obvious signs of mold. Additionally, if you notice that people who are in your building every day are exhibiting symptoms of mold exposure, you need to contact one of those professional mold inspectors. Doing so can help save you money in potential claims against your business. It is also your ethical responsibility to protect your employees, your clients, and your customers from mold exposure while on your property.

You should also make sure that you have adequate flood insurance. Not only does flood insurance help you replace any materials that were damaged in a flood, but virtually every flood insurance policy also covers the cost of mold remediation. Since mold remediation is such a specialized field, the cost can be significant. According to HomeAdvisor, the average cost for mold remediation can be anywhere between $1,800 and $3,300. You don't want to be financially responsible for that, so having a good flood insurance policy is a must.

You can also take certain preventative steps to protect your facility from mold. EnduraFlood produces a drywall that is water resistant and is therefore mold resistant. Mold requires moisture and a food source, so if your traditional drywall gets wet, mold has what it needs to thrive and reproduce. Taking the step to have EnduraFlood Drywall installed in your commercial facility not only protects you financially, but it also helps protect the people who are in your business' building every day.


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