Leasing an Office: Does Your BOP Cover Flood-Damaged Equipment?
By Atlas Risk Partners ·
Usually not without specific flood protection. Flood is commonly excluded from standard commercial property coverage, including the property portion of a business owner’s policy (BOP). Before moving equipment into a leased office, verify the actual flood wording rather than relying on a property limit or the landlord’s insurance. Review equipment damage and flood-related business interruption as separate coverage questions.
1. Find the flood wording—not just a property limit
A property limit does not establish that every cause of damage is insured. The California Department of Insurance’s commercial-insurance guide identifies flood as a common exclusion even under open-perils coverage, which covers losses unless excluded. Chubb’s BOP explainer likewise identifies flood as typically outside standard property coverage. Neither description establishes coverage under your policy.
Before moving workstations, networking equipment or an AI development lab into leased space, ask the broker to identify the wording supporting each answer below. Keep the coverage form and page reference alongside the answer, rather than relying on a proposal’s general description of property protection.
- Where does the policy exclude flood, and does an endorsement change that exclusion?
- Does any offered flood protection include business contents at the exact office location?
- What flood definition, contents limit, deductible and remaining exclusions apply?
- Would the proposed protection use an endorsement or a separate policy?
Sources: California Department of Insurance: Commercial Insurance Guide · Chubb: Business Owner’s Policy (BOP): Coverage & Eligibility
2. Separate the landlord’s building from your equipment
Travelers’ commercial-lease guide explains that landlord insurance typically protects the building, not the tenant’s property. Its guidance distinguishes that protection from insurance for a tenant’s equipment, inventory and furnishings. A landlord’s statement that the building is insured therefore should not substitute for checking your equipment coverage.
Create an ownership list with four categories: landlord property, company-owned equipment, leased equipment and company-funded improvements. For each category, ask who is responsible for arranging insurance and which proposed policy would respond to flood damage.
