01 / The meaning
What it means.
Flood, stormwater runoff, storm surge and escape of liquid can be treated differently. Read the actual definition and endorsement applicable to the business premises instead of relying on everyday descriptions of water damage. A location outside a familiar flood zone is not proof of no exposure: drainage, access roads, neighbouring waterways and ground levels can affect business disruption.
Buildings, stock and equipment are separate from lost income. Business interruption cover may require insured physical damage and may have its own flood restriction, waiting period or sublimit. Review basement storage, electrical equipment and temporary relocation plans alongside insurance. Maps and past events help describe the exposure but cannot establish policy acceptance or promise a claim payment.
02 / Put it in context
A practical example.
Hypothetical example: Water from a nearby creek enters a wholesaler’s warehouse and damages packaged stock. The insurer would examine the source of the water, the flood definition, insured locations and stock values. Any interruption claim needs separate assessment.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Check whether flood is included, excluded or subject to a separate endorsement.
- Check flood excesses, sublimits and any aggregate cap.
- Check the interruption section’s flood trigger and premises requirements.
04 / Start a useful conversation
A question for your broker.
How would water entering this location be classified under the wording?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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