Joyce M. Rosenberg, AP Business Writer
NEW YORK (AP) — When flood waters washed through Ames, Iowa, last week, Jim Howe got his latest lesson in how hard it can be to protect a business from disaster. And to recover.
Howe Welding and Metal Fabrication flooded for the fourth time since 1993. He's still cleaning up and getting his machinery working again.
Jay Hennessey learned a similar lesson. Earlier this month, Hennessey reopened his Ashland City, Tenn., gym three months after it was shut by an unexpected flood.
A flood can be one of the worst catastrophes to hit a small business. Water gets in everywhere, bringing with it mud and debris. It can take days to recede, and when it does, it leaves ruined equipment and furnishings, and sometimes, mold.
And unlike damage from fire and wind, or even rain water that comes in through a hole in the roof, the devastation caused by flooding isn't covered by a standard business owner's insurance policy. Owners need to purchase flood insurance separately and some find it's too expensive to carry.
TORRENTIAL RAINS, UNEXPECTED FLOOD
As the owner of two Snap Fitness gym franchises near Nashville, Hennessey never had to deal with a flood. But 16 inches of rain fell over a 24-hour period in Ashland City, and his gym, full of treadmills, weight machines and other exercise equipment, was flooded with 18 inches of water.
Hennessey said he was able to save most of his equipment, but it had to be cleaned and repaired. The treadmills were destroyed. The building had to be cleaned and repainted. All told, the flood cost Hennessey $200,000.
By being a franchisee, got help from the Snap Fitness corporate offices. Hennessey said the company helped with the physical recovery, and Snap Fitness kept him focused on the fact that although the gym was shut, he had to keep building for the future.
"You can get myopic, really focused on recovering," he said. "You forget that you have to get out and market your business."
Hennessey didn't have flood insurance because he wasn't in an area considered at risks for flooding. "There was no reason for us to think we needed flood insurance," he said.
This meant he couldn't be reimbursed under his regular business owner's policy. He also said he can't get a payout from business interruption insurance, which covers a company's operating expenses when it's shut down. Because the underlying cause of the disruption to his business was flooding, Hennessey said he couldn't collect anything.
Hennessey has taken out a Small Business Administration disaster loan to cover the costs of restoring his business and getting it operating again. As a condition of getting the loan, he has had to purchase flood insurance. However, because he's not in a high-risk area, he calls the insurance "relatively inexpensive."