Misperception that endangers businesses: ‘We’re not in a flood zone’

If you’re wondering if your business is in a flood zone — and a lot of New Jersey businesses may be wondering that Monday — consider this thought from Brooke Maslo, an associate professor with the Rutgers University Department of Ecology, Evolution and Natural Resources in the School of Environmental and Biological Sciences.

“With more than 1,800 miles of coastline and 6,450 miles of rivers in New Jersey, much of New Jersey’s developed land is at risk of being severely affected by flooding over the next 30 years,” she said.

Or this, from Aaron Levine, owner of the LG insurance agency in West Long Branch, who has seen many businesses fail or decline to obtain proper flood insurance coverage.

“We often get the statement: ‘I’m not in a flood zone,” Levine said. “Everybody’s in a flood zone — there is always a risk of flooding.”

The storm that surged up the coast Sunday and Monday — the one that had numerous areas from Maryland to Maine under a flood watch — certainly brings the question of flood plains and flood insurance to the forefront.

Levine said Hurricane Irene in 2011 and Superstorm Sandy in 2012 should have been the wake-up call. Those events proved floods can batter businesses throughout the state, though, not just down the Shore, he said.

“Coastal risks versus river and stream risks are a little bit different, but still are a pain,” he said. “Commercial flooding is bad.”

Flooding is the most common and most expensive natural disaster, according to Pew Charitable Trust.

Insurance company Chubb, with U.S. headquarters in Warren, reports that flood risk is “severely underappreciated, underestimated and misunderstood by middle-market businesses.”

The U.S. government’s National Flood Insurance Program points out that 99% of counties in the U.S. have experienced a flood, and that flooding causes an average of more than $5 billion in damage nationwide per year.

And, while this year did not see anything of the likes of Irene or Sandy, don’t be lulled into thinking those were once-in-a-generation moments.

The 2023 Atlantic hurricane season ranked fourth all-time for most named storms since 1950.

The potential for damage is everywhere.

For starters, rising water often inundates commercial buildings, including those under construction. And new construction projects take away spaces where flood water used to go, forcing water to find a new home.

“Water needs somewhere to go,” Levine said. “And water will win every single day. So, every business is at risk in some way, shape or form when it comes to flooding.”

Levine said businesses make a mistake of looking at the past instead of the present or future.

“Rivers, creeks, dry creek beds that have been dry for many years (can) suddenly overflow like in Long Branch and Neptune during the late September storm that we had,” he said. “There’s just a tremendous amount of risk for New Jersey business.”

Levine said the lack of business interruption Insurance coverage for flooding is a huge risk that is overlooked when businesses negotiate building leases and purchases.

“Understanding this missing piece is very important for business owners as they are essentially ‘self-insuring’ that part of the flood risk.”

Prevention is a key strategy for any business facing flood risk, Levine said.

“Avoidance is one of the biggest risk management tools out there,” he said. “Understanding the risks associated with being in certain areas (and) understanding if the municipalities have taken the necessary steps to better their flood risk (are important).”