Flood Insurance - contents

I'm just making sure, but if we take contents as collateral that require flood insurance (production machinery), the amount needed would be the value of machinery less the depreciation correct?

Thank you

I assume that you mean if you take a building and contents?

Yes, content insurance is based on ACV.

Yes, the building is taken as well. We have a loan and flood insurance on the building already. This new loan is to purchase the production machinery so very little depreciation should be deducted I assume.

If they aren't on one loan (building and contents), then contents coverage is not required by regulation. S&S issues may prevail however.