Written by: Lindsey Lessard, Vice President of NEXO Insurance, Broker Representative for Alternative Balance
Water Damage 101: Covered or Not?
Water damage is one of the most common claims for small business owners, but not all water-related events are treated equally in your insurance policy. As a member of the Alternative Balance insurance program, here’s what you need to know about how your Business Personal Property and Business Income/Extra Expense (“BPP/BI”) coverages respond to water damage.
This protection is crucial for keeping your business running after unexpected physical damage to your covered items.
Covered Water Damage Events
The good news? Your policy does provide coverage for certain types of water damage, specifically those that cause direct physical loss to your business personal property – including equipment, furnishings, electronics, and other items you own or control for your work.
If water enters your space due to a leaking pipe or roof leak and damages your equipment, then that scenario is intended to be covered by the Alternative Balance BPP/BI policy. The policy also provides business income and extra expense coverage if the physical damage disrupts your operations. Pretty cool, right?
What’s Not Covered
Even though there is plenty to be excited about with the Alternative Balance business personal property coverage, there are also several important exclusions to be aware of. Your policy does not cover:
- Flooding from rising water, storm surge, or overflow of any body of water
- Sewer or drain backup, including sump pump overflow
- Groundwater seepage into basements or through foundations
- Mudslides, mudflows, or earth movement involving water
- Waterborne debris or contaminants carried by flood or mud
Also critical: This policy is designed for business personal property only. It does not cover damage to the physical building or structure, including tenant improvements or flooring. Certain service types and coverage levels may offer additional coverage for tenant improvements and flooring. Contact us for more information.
What This Means for You
- If your equipment is damaged by a burst pipe or roof leak, coverage is extended.
- If flood water enters your building, any resulting damage is excluded.
- If building elements like walls, ceilings, or tenant improvements are affected, they’re not covered under this policy.
- Flood insurance or additional property policies may be needed to fill these gaps.
Understanding what your policy includes and what it doesn’t can help you prepare for the unexpected. If you need help exploring additional coverage for floods or structural elements, please contact us.
Contact Us
If you have additional questions, please email us at [email protected] or give us a ring at (800) 871-3848 Monday-Friday 9am-5pm EST.
Want more insurance tips and information? Check out our other monthly insurance blog posts! New posts are uploaded during the first week of every month. If there are any specific topics that you’d like us to touch on, please shoot us an email at [email protected]!
