Flood risk has expanded beyond traditional high‑risk zones

Flood risk in the United States has changed. Flooding used to be framed as a coastal or a riverfront issue. However, recent industry studies show that flood exposure now extends far beyond those areas. Chubb’s 2026 research notes that intense rainfall events have dramatically increased flood potential, including areas previously considered low risk.

Moreover, an Pew analysis of storm-event data from the National Oceanic and Atmospheric Administration found that, on average, at least one flood occurred in the U.S. nearly 300 days per year since 2000 — underscoring that flooding is a year-round operational issue, not a seasonal headline.

Today, the most practical mindset is simple: if it rains where you operate, flooding is a business risk.

What to do:

• Screen every location for flood drivers beyond coastline/river proximity, such as drainage capacity and nearby elevation changes. Rainfall‑driven flooding can occur with little warning and can significantly disrupt operations.
• Rank critical sites (e.g., distribution, manufacturing and data/IT) as well as sole-source suppliers by downtime impact — not just property value.

Don’t assume flood coverage is included in current policies. Close the coverage gap.

A widespread misconception persists that standard commercial property policies automatically cover floods. In reality, flooding is typically excluded unless it is purchased separately.

Even when in force, NFIP commercial policies focus on direct physical loss with separate deductibles for building and contents — often leaving business interruption, equipment and supply‑chain exposures unprotected.

What to do:

• Work with your insurance professional to review your coverage annually.
• Confirm how flood coverage is treated in your property program and consider purchasing additional limits.
• Check limits vs. real exposure. NFIP can be a foundation, but it may not align to higher-value commercial properties or certain loss scenarios, when excess coverage may be necessary.
• Assess business continuity needs explicitly. Business interruption and extra expense needs should be evaluated intentionally within the design of your overall insurance program.

The status of the NFIP creates market uncertainty

In 2026, the status of the NFIP is a real planning variable. As of January 30, 2026, the program had expired; however, it's recently been extended through September 30, 2026. While this extends coverage through September 2026, it’s still uncertain whether the government will decide to renew the program beyond that time.

This uncertainty introduces operational and financial risks; therefore, turning to private flood insurers is an option that should be explored.

What to do:

• Start flood insurance placement or renewal early.
• Evaluate private flood insurance alternatives, which have grown significantly.
• Maintain documentation, such as applications and premium payments, to ensure valid policy issuance during authorization gaps.

Flood exposure is one of the most urgent and underestimated risks facing commercial insurance buyers in 2026

Awareness requires a more proactive, data‑driven approach than ever before. With expanded exposure, heightened rainfall events and ongoing uncertainty surrounding NFIP reauthorization, commercial policyholders need to take decisive steps to safeguard their operations.

Segal’s Insurance Brokerage Practice helps organizations assess risk accurately, navigate NFIP and private‑market options, as well as build tailored insurance programs that enhance resilience and long‑term value.