As Hurricane Sandy chugged up the East Coast in late October, company owners with inadequate business insurance policies held their collective breath and hoped that the superstorm did not strike their region directly.
Those in New York and New Jersey suffered the brunt of the damage, with more than $80 billion in losses. Whether those losses came from rising sea levels, extreme wind or fires caused by damages to electrical systems, many area businesses had likely never before seen such widespread destruction.
As the region continues to rebuild, businesses in areas similarly prone to natural disasters should not overlook the lessons Sandy provided to them, especially considering that similar events could be more prevalent in the future.
Climate change and corporate risk management
Using Sandy as the most recent example, Ars Technica reported this week that losses attributable to weather- and climate-related disasters have quintupled in the last 30 years, causing insurers to take more seriously the effects of climate change. With their own interests at stake, many insurers are working with customers to help them to lessen their impact on the environment.
"When risks are too great or undefined, insurers tighten availability, increase prices and modify terms of coverage," according to the article. "They often end up dually exposed, to both internal risks such as underestimating climate-related losses, and the risks taken by their customers."
Businesses on the West Coast may not have to worry about the next superstorm, but there's always the risk of wildfires and earthquakes. There's little reason not to be protected through California business insurance. Companies need to be able to rebound quickly following a natural disaster or weather event, and through guidance provided by commercial insurance specialists, businesses can be prepared for anything.