How to help protect your business from natural disaster

While the likelihood of a natural disaster affecting your business may seem small, investing in planning and preparedness can yield significant savings—especially as these events increase in frequency and severity. Already in 2025, devastating wildfires in Southern California have displaced 100,000 residents¹, destroyed over 16,000 buildings, and caused an estimated $50 billion in damages.²

The U.S. Chamber of Commerce estimates that every dollar invested in resilience and preparedness saves $13 in post-disaster damage, cleanup, and economic costs. However, only 20% of businesses are equipped to handle the impacts of extreme weather. Just 17% of organizations regularly rehearse their response to major disruptions and 25% have no resilience-building mechanisms in place.³

A strong financial partner can help business owners think through the necessary steps to prepare for a disaster. Too often, businesses wait until they are in distress to seek financial assistance, at which time options may be more limited or more expensive. That’s why it’s important to engage your banker early, when your business is stable and performing well. Taking time to plan, secure capital, and build financial reserves can help position business owners to better navigate unforeseen challenges and maintain long-term continuity.

By taking proactive measures, businesses can safeguard assets, mitigate risks, and recover more effectively when disaster strikes.

Protect your business

To protect assets and operations, businesses should regularly review and update insurance policies to cover potential disaster-related losses. Designing an insurance program to address your specific risks is essential. The U.S. Small Business Administration (SBA) advises working with a reputable and licensed agent, comparing policies, and reassessing plans annually to ensure adequate coverage.

Additionally, the IRS recommends documenting business equipment and valuables to provide accurate market value assessments for insurance and casualty loss claims. Other protective measures include finding alternative vendors to support supply chain continuity, performing regular data backups, and using cloud storage to secure critical business information in the event of physical damage to files or on-site servers. 

Plan and train

Effective planning and training are key to ensuring business continuity during a disaster. Follow these four steps to be prepared:

1. Develop an emergency response plan to keep employees safe and business operations running. At a minimum, Occupational Safety Health Administration-compliant plans should include evacuation routes, emergency reporting procedures, post-evacuation protocols, and clear communication mechanisms for employees. It’s also important to assign a disaster plan coordinator and review plans annually to maintain their relevance. 
2. Build an emergency kit with essential supplies such as batteries, first aid kits, non-perishable food, flashlights, emergency contact lists, and water. Supplement these with safety equipment and backup resources, including generators, fuel, and communication devices.
3. Train your team so employees are familiar with emergency procedures and their roles during a crisis. Host sessions to reinforce these roles and provide advanced training for team leaders.
4. Establish a plan to keep open lines of communication with customers, employees, and suppliers during emergencies. Use existing channels to provide updates, address concerns, and keep all parties informed. Include protocols for using social media platforms to keep stakeholders informed and engaged during critical situations. 

When disaster strikes

When disaster hits, safety must come first. Implement your emergency response and communications plans, contact your insurance provider, and explore assistance programs such as those offered by the SBA and local organizations.

After restoring operations, support employees and the wider community in the aftermath of a disaster. For example, you can collaborate with local authorities and organizations to aid recovery efforts. You should prioritize the well-being of your employees—encourage them to voice their challenges and provide the support they need to focus on rebuilding their homes and communities. If possible, contribute to recovery efforts through donations, volunteering, or creating care packages with essential items. That said, it is important to ask employees what they need rather than making assumptions.

Businesses can look to community partners and financial institutions for support. For example, following the catastrophic wildfires in Los Angeles, Bank of America committed $2 million toward recovery efforts.

Resources for resilience

To enhance your preparedness, leverage resources like the U.S. Department of Homeland Security’s Ready Business program, which has tailored plans for various disaster scenarios, including earthquakes, hurricanes, inland flooding, power outages, severe wind, and tornados. The SBA also offers disaster assistance programs, including guidance on loans and recovery resources.

Ultimately, investing in disaster preparedness enables businesses to protect their operations, support employees, and minimize financial losses during natural disasters. Preparedness is more than a precaution—it’s a critical strategy for resilience in an era of extreme weather and escalating natural hazards.

¹ Boston University, Trauma from Los Angeles Fires Will Take a Village to Treat.

² Georgetown University, L.A. Residents, Businesses Face a Decision After Wildfires: To Rebuild or Relocate.

³ Association of Chartered Certified Accountants, Weathering the storm: Building resilience against climate disruptions.