Product Update

2019 Revisions to ISO Commercial Flood Insurance Program in Commercial Property Insurance


This release to Commercial Property Insurance addresses the 2019 revisions to the  Insurance Services Office, Inc. (ISO), commercial flood insurance program.

ISO recently revised its commercial flood program by introducing a new endorsement and revising two existing endorsements. These changes were made in response to federal regulations that became effective in July 2019, addressing the requirement included in the Biggert-Waters Flood Insurance Reform Act of 2012 that federally regulated lending institutions accept private flood insurance on property located in special flood hazard zones. The newly added commercial flood endorsement and the two revised commercial flood endorsements are designed for use by insurers in meeting the requirements for "mandatory acceptance" of an ISO commercial flood insurance policy by federally regulated lenders.

The 2019 editions of the conforming clause endorsements—conforming clause (FC 12 02) and conforming clause (residential condominium association) (FC 12 04)—contain a new provision stipulating that the policy meets the definition of private flood insurance contained in the regulations in satisfaction of the requirements for mandatory acceptance.

The newly introduced increased cost of compliance coverage endorsement (FC 02 02) adds the same increased cost of compliance coverage that is provided by a National Flood Insurance Program (NFIP) policy, subject to the same $30,000 limit of insurance that is provided for this coverage by an NFIP policy, unless a higher limit is shown in the endorsement schedule. This new endorsement is an alternative to purchasing the increased cost of construction and demolition cost coverage options with a limit of at least $30,000 applying to each, which would also satisfy the requirements for mandatory acceptance.

The new and revised ISO commercial flood insurance endorsements will become available for use in September 2019 in a majority of jurisdictions.

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