Flooded and Failing: The Coverage Crisis Facing Small Business Owners

The 2025 Gallagher Business Owners Survey is in—and the findings are eye-opening. Based on responses from 1,000 U.S. business owners:

• 90% are at least somewhat worried about insurance not covering a specific event or loss.
• 91% are concerned that a natural disaster could negatively impact their business.
• 87% filed an insurance claim in 2024.
  • 73% of those claims were for $25,000 or more.
  • 27% filed a flood insurance claim.
  • 25% filed for business interruption coverage.
• 29% of business owners say they plan to expand their flood insurance coverage in 2025.

Flood risk is clearly on the rise—especially as hurricanes continue to grow in frequency and intensity. Yet, flood insurance remains a low priority for many businesses, particularly small ones. According to Munich RE, nearly 100% of U.S. commercial policyholders with annual business income under $250,000 have no flood coverage. And the average business flood claim? Roughly $90,000.

Imagine trying to reopen after taking a hit that size. It’s no surprise that 40% of small businesses fail to reopen after a disaster—and 90% close permanently within two years.

As agents, we must do more to educate business clients on how to protect themselves from catastrophic risks like flooding. At AFR Insurance Services, we partner with agents to:

• Shop the most competitive flood insurance policies across the private market and the NFIP.
• Provide educational tools and resources to help clients understand their true flood risk.

Explore our agent resources for guidance on flood insurance terms, coverage requirements, NFIP policies, and more.

And don’t forget: Flood damage often results in weeks or even months of business closure. During that time, regular overhead costs don’t pause. That’s why business interruption coverage is critical—it provides essential support when businesses need it most.

At AFR Insurance Services, we’re the trusted flood insurance experts for agents nationwide—backed by 30+ years of experience, a growing network of private insurers, and a comprehensive approach to flood protection.

Get appointed today and put our expertise to work for your agency.