Flooding in the business district of Kempsey, New South Wales, Australia, in 2001 allowed the collection and analysis of commercial flood damage data. Analysis indicated that direct losses were significant, totalling A$2.5 million. Data were variable owing to differences in the vulnerability of businesses to flood damage, differences in the impacts of the hazard upon businesses and survey uncertainty. Little direct relationship was found between direct commercial damage and over-floor water depth. Simple averaging and stage-damage curve loss estimation methods ignore the large variability present and result in inaccurate estimation of direct commercial damage. Probability loss estimation methods account for the variability present by assessing the chance of loss values occurring at specified depths of over-floor flooding.