Whether you’re a skeptic on climate change or not, there’s no denying the catastrophic weather the world has been facing in past years. Hurricanes, wildfires, earthquakes, snow and ice storms, tornadoes and more have been wreaking havoc on the world—and caused billions of dollars in damage in the United States, not to mention loss of lives. To manage risk, business owners must be prepared in the event of climate-related disasters in your area, especially if your company does business in multiple geographic regions.
High-cost weather-related disasters
Some of the most expensive natural disasters in recent history happened in 2017. According to the National Centers for Environmental Information, from October to December 2017, the United States experienced its highest-cost natural disasters since 1980, at close to $400 billion dollars. These included:
- Hurricane Harvey. Touching down in late August 2017, Hurricane Harvey ripped through Texas, with up to 60 inches of rainfall in some parts. It caused more than $125 billion in damage, second to Hurricane Katrina.
- Hurricane Irma. Following close on the heels of Harvey, Hurricane Irma hit in early September in the Florida Keys and Caribbean, including the U.S. Virgin Islands. Widespread destruction in the Keys wiped out 25 percent of buildings and damaging 65 percent. Winds swept up the coasts of Florida and South Carolina before Irma was finished. Altogether, costs of damage are estimated at $50 billion in the U.S. alone.
- Western wildfires and California firestorms. From summer to fall 2017 and with reaching their height in October, wildfires devastated more than 9.8 million acres of land in many western and northwestern states, in particular California and Montana. As conditions were enhanced by the season’s drought, they caused an unprecedented amount of damage—close to $18 billion. The disaster destroyed over 15,000 homes, businesses and other structures and lead to 44 deaths.
Climate risk insurance
Damages caused by natural disasters can be mitigated through climate risk insurance, protecting individuals and businesses from the impact of extreme weather events. This requires an assessment to determine what It’s important to tailor the policy to the unique needs of the region, in terms of the types of climate risks faced. When combined with preventive risk management, a company can help reduce the losses and damages sustained due to climate and weather-related disasters.
Preparation for natural disasters
In addition to climate risk insurance, your company can take other preventive actions to help sustain and preserve your business despite extreme weather conditions. These include:
- Creating an emergency plan. How will your business operate when faced with a weather-related emergency. This includes how days, hours and workspace might be adjusted and whether employees can work from home.
- Backing up data. Paper and electronic files must be backed-up and protected in case of damage to your business location. A cloud-based storage system is one way to keep your information safe.
- Communicating with employees, clients and customers. How will you convey emergency procedures to everyone affected by your business? It’s important to have a plan in place before to help ensure business as usual.
- Contacting an insurance advisor. How much coverage should your company carry? Do your policy limits cover the cost of a full replacement due to property damage? Talk to your insurance partner to be sure you’re adequately covered.
Need guidance for your risk management?
Climate and weather risks are more pressing than ever before, and it helps to be prepared. For help assessing these and other risks, check out Odell Studner. We’ll help you design a plan for risk management and protection.