Change in title, ownership, or management of the vessel.Ĭ) The policy must include protection and indemnity, breach of warranty, and pollution coverage.ĭ) The policy or endorsements must provide for at least 10 days prior written notice to the CDC/SBA of policy cancellation.Ī) SBA flood insurance requirements are based on the Standard Flood Hazard Determination (FEMA Form 086-0-32 or its successor). Failure to comply with any warranty or condition out of mortgagee's control orĬ. Act, omission, or negligence of the mortgagor, owner, master, agent or crew of the insured vessel ī.
#FLOOD INSURANCE REQUIREMENTS FULL#
The policy or endorsements must provide for at least 10 days prior written notice to the CDC/SBA of policy cancellation.Ī) Coverage in the amount of the full insurable value on the vessel(s) with the CDC/SBA designated as "mortgagee" must be obtained when the vessel is the collateral on the loan.ī) The policy must contain a mortgagee clause providing that the interest of the CDC/SBA will not be invalidated by any:Ī. This clause must provide that any action or failure to act by the debtor or owner of the insured property will not invalidate the interest of the CDC/SBA. (3) Insurance coverage must contain a LENDER'S LOSS PAYABLE CLAUSE in favor of the CDC/SBA. (2) If full replacement cost insurance is not available, coverage must be for maximum insurable value. (1) Coverage must be in the amount of full replacement cost. NOTE: A copy of the policy must be provided to the CDC/SBA. The policy or endorsements must provide for at least 10 days prior written notice to the CDC/SBA of policy cancellation. This clause must provide that any action or failure to act by the mortgagor or owner of the insured property will not invalidate the interest of the CDC/SBA. (3) Insurance coverage must contain a MORTGAGEE CLAUSE (or substantial equivalent) in favor of the Certified Development Company (CDC)/SBA. (2) If full replacement cost insurance is not available, coverage must be for the maximum insurable value. (1) Coverage must be in the amount of the full replacement cost. The borrower must also maintain a separate policy if the business is located in a state that requires additional coverage(s) such as wind, hail, earthquake or other. Q: What are the Small Business Administration's (SBA) requirements regarding insurance pertaining to a 504 loan project?Ī: The SBA requires insurance on ALL assets pledged as collateral.
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