How to Avoid E&O Mishaps With Flood Insurance

Retail agents and insurance brokers must understand that standard homeowners and dwelling or commercial property insurance policies do not include coverage for flooding events. At DUAL, we recommend you always offer primary flood insurance and excess flood coverage if values exceed the maximum coverage available on all property type submissions. If the client decides not to purchase the coverage, make sure they sign an acknowledgement that they have been offered flood insurance and have decided not to purchase the coverage to avoid costly E&O errors on your end.  

Insurance agents may come across mistakes when processing flood insurance that could lead to potential E&O exposure. The following checklist will help with this common mistake.


  • Make sure the customer understands that a homeowner's policy does not cover losses from a flood.
  • Never advise a potential customer that they do not need flood insurance or that they would only need minimal limits. Offer excess coverage over the NFIP limits.
  • Be sure to offer flood insurance, even if the property is not located in a high-risk flood zone. 
  • Make sure you understand the NFIP effective date rules and explain the 30-day waiting period to your customers. 
  • Make sure you know and explain the building replacement cost provision under the NFIP Dwelling form.
  • Explain that content coverage is not provided unless it is specifically requested on the application and is shown on the declaration pages. Explain that content losses are always paid on an Actual Cash Value basis.
  • Make sure you understand and explain the definition of a basement and which contents are covered and what is excluded. 
  • Understand the definition of the lowest floor elevation and what constitutes an enclosure. 
  • Be aware of the co-insurance penalty under the RCBAP (Condo form) policy.
  • Be mindful of upcoming FEMA Map changes as they can place low-risk locations into a high-risk zone. This could cause a gap in coverage. 
  • Be aware of the previous underwriting on any Broker of Record accounts. 
  • Offer Primary NFIP and Excess Flood coverage on all new and renewal policies. Make sure you obtain a waiver/rejection of coverage if needed.  
  • Review coverage and exclusions (i.e. flood zones & distance to zones) on private market flood policies, DIC coverages, and commercial packages.
  • Make sure the customer understands that a separate flood policy is required for each building.  


Flooding causes more destruction than any other type of natural disaster. Because many homeowner's policies do not offer flood coverage, it may be a good idea to look into programs for your clients. With our flood program, you can receive coverage for flooding in buildings, residential or business contents, and loss of income. For more information, please refer to our flood programs. You can also download our flood eBook to see how we've helped brokers just like you offer more competitive coverage. 

New call-to-action