(Calgary flood 2013. Photo credit: Ryan L. C. Quan.)
ISO (Jersey City, N.J.) has launched a new commercial flood insurance program that enables insurers to set their own limits of insurance and provide optional coverage for risks not typically covered by the National Flood Insurance Program (NFIP), including certain types of property damage to basements, business interruption, and costs to comply with building code changes, according to a vendor statement. The coverage can be based on actual cash value or replacement cost value. The new program features what ISO describes as actuarially sound loss costs based on models developed by parent company Verisk’s AIR Worldwide business and from ISO data.
Insurers can use the program to provide a primary flood policy or a flood policy providing coverage that is excess of the NFIP, which is currently being reviewed by the U.S. Congress in anticipation of the program’s scheduled sunset on September 30, 2017, ISO reports.
Addressing Complex Coverage Needs
“Recovering from a flood can be a major challenge for businesses because expenses can quickly escalate out of control. But underwriting commercial flood coverage is still new to many insurers, and they don’t have the tools needed to cover and price the wide range of risks that businesses face,” comments Maroun Mourad, president, ISO Commercial Lines. “Our new program can help insurers address complex coverage needs and achieve profitable growth in commercial flood insurance.”
ISO also announced plans to introduce similar solutions for the personal property market.
“The market for property insurance generally is highly competitive, and with an increased awareness of the potentially disastrous effects from the peril of flood, insurers will have the tools to offer more robust protections to their policyholders,” Mourad adds.