Does a Marina need Flood Coverage?

Most property policies exclude flood coverage for land-based property such as buildings. A flood policy can be purchased to cover the land property but unfortunately, due to the location of marinas in high hazard flood zones, the coverage can be very expensive. In addition, a flood policy has a 30-day delay before coverage takes effect. Do you need flood coverage for your land property? Have you experienced a major flood since you have owned your marina? If so, is any of your land property at risk if the lake floods to maximum elevation or even a couple of feet higher than the “top of flood pool”? A lake can definitely flood to heights above the “top of flood pool” if the conditions are right. I have personally experienced this on Beaver Lake. So, if any of your land property is at risk of flood damage, you should ask your agent for a flood quote to determine whether you wish to cover this peril with insurance.

Boat docks are typically covered under an inland marine “Piers, Wharves, and Docks” policy and flood is usually a covered peril under those types of policies and that coverage is in effect for the entire policy term, with no 30-day delay in coverage. There are a few insurance companies that will endorse a standard property policy to include dock coverage but those types of policies would exclude any dock damages due to flood. You need to check with your agent to confirm which type of coverage you have because a flood can damage dock walkways, electrical systems, fuel systems, winches/cabling, etc. If your policy covers flood damage to your docks, you may also have a loss of business income claim as well.

If you have, or are considering purchasing an insurance policy that excludes flood for your docks, ask yourself whether you are prepared for fast rising water, water current, and able to maintain access to your docks. If you have already experienced flood conditions, you have a pretty good idea what can happen to your docks, electrical system, and fuel system. Flood damage to docks is typically limited and due to the flood deductible, this exclusion may not be a huge issue to you. However, if you haven’t experienced a major flood, you may want to purchase a policy that will cover flood so that you don’t experience any financial loss due to a flood.

If you are unsure, you should discuss this issue with your agent.

Doug Timmons, CIC, CMIP
Marina Insurance Specialist
Commercial Risk Service