A Quiet Forecast Is Not a Plan
Colorado State University is projecting a below-average Atlantic hurricane season in 2026, with 13 named storms and 6 hurricanes expected as developing El Niño conditions increase wind shear across the Atlantic. That sounds like good news, and it is, as far as overall storm activity goes. But a seasonal forecast covers probability across the entire basin. It does not tell you whether a storm will form in the Gulf, whether it will make landfall in Texas, or whether your building will be in its path. It only takes one storm hitting the wrong place to shut a business down for weeks, and a quiet season on paper offers no protection to the business that gets hit.
The pattern in Texas in recent years reinforces the point. June 2026 alone brought flooding, hail, and tornado damage across multiple counties, none of it tied to a named hurricane. Severe weather events in Texas do not wait for hurricane season to begin. They happen year-round, and the financial damage they cause to businesses is real and immediate, regardless of what the seasonal forecasts say.
Standard Policies Do Not Cover Flooding
This is the single most important coverage fact that business owners in Texas need to understand: standard commercial property policies do not cover flood damage. That includes storm surge, rising water, and overflow from rivers or drainage systems. If water enters your building from outside and it is classified as a flood event, your commercial property policy will not pay the claim. It does not matter how comprehensive the rest of your coverage is. Flood is a separate peril that requires separate coverage.
Flood coverage for commercial properties is typically obtained through the National Flood Insurance Program, although private flood insurance options have expanded in recent years. The critical detail that catches many business owners off guard is the waiting period. Most NFIP flood policies carry a 30-day waiting period before coverage takes effect. That means if a storm is already forming or a flood watch has been issued, it is too late to add coverage and have it apply to that event. The time to address flood coverage is before you need it, not during a weather advisory.
Business Interruption and Flood: A Layered Problem
Even business owners who carry flood coverage may have a gap they have not considered. Business interruption coverage, which replaces lost income during a forced closure, is typically tied to your commercial property policy. If your property policy excludes flood, your business interruption coverage usually follows the same exclusion. That means a flood event can damage your building and shut your doors, and while your flood policy may cover the physical repairs, the lost revenue during the weeks or months you are closed may not be covered at all.
This layered problem is one of the most common and costly gaps we see in commercial insurance programs. The building gets repaired, but the income lost during the closure comes out of the owner’s reserves, if there are reserves to draw on. For businesses that operate on thin margins, which describes most small businesses, this gap can be the difference between reopening and closing permanently.
What You Can Do Before the Season Peaks
A short conversation about your coverage now is worth far more than a claim call after an event. Start by confirming whether you have flood coverage in place and whether the limits are adequate for your property. If you do not have flood coverage, consider whether your location, building type, and exposure justify adding it, keeping the 30-day waiting period in mind. Then check your business interruption coverage to understand whether it responds to flood-related closures or follows the same exclusions as your property policy.
Beyond the coverage itself, basic preparedness matters. Knowing where your critical documents are, having a plan for securing or moving inventory, maintaining emergency contact information for your team, and understanding what your lease requires in the event of a closure are all things that take very little time to organize and can save a great deal of stress when the unexpected happens. donegan can help you review your current program, identify gaps in your flood and business interruption coverage, and make sure your protection matches the reality of doing business in Texas.
Frequently Asked Questions
Does my commercial property policy cover flood damage?
No. Standard commercial property policies exclude flood damage, including storm surge and rising water. Flood coverage must be purchased separately, typically through the National Flood Insurance Program or a private flood insurer.
How long is the waiting period for flood insurance?
Most NFIP flood policies have a 30-day waiting period before coverage takes effect. This means you cannot purchase a flood policy after a storm is already in the forecast and have it cover that event. Planning ahead is essential.
Does business interruption insurance cover flood-related closures?
It depends on your policy. Business interruption coverage typically follows the same exclusions as your underlying property policy. If flood is excluded from your property coverage, your business interruption coverage usually will not apply to a flood-related closure either. This gap can be addressed with the right policy structure, and it is worth reviewing with your agent.
