Disaster doesn’t discriminate. Every business is at risk.
Floods are hitting towns that never worried about rising rivers. Fires are sweeping through suburbs that once felt safely tucked between the city and the forest. And storms are striking farther inland than ever, just ask the business owners in Chapel Hill, NC, where Tropical Storm Chantal turned a shopping center into a disaster zone overnight.
Disasters aren’t rare anymore. They’re relentless—and they’re rewriting the definition of business risk.
The Expanding Threat
Natural disasters are no longer confined to predictable zones. Hurricanes and tropical storms, once seen as coastal threats, are now devastating inland communities. Heavy rains are turning calm brooks, rivers and streams into destructive forces in areas where flooding was once rare. . Kerrville, TX, is still reeling from a catastrophic July 4 flood. In Asheville, NC, 30 inches of rain and Hurricane Helene wiped out 80 percent of the River Arts business district.
America is still reckoning with the devastation of the Los Angeles wildfires, which turned once-thriving residential and business districts into burned-out wastelands, leaving behind toxic residue. Once confined to rural mountain areas, these fires are now consuming dense urban zones. January’s historic fires in Pacific Palisades, Malibu and Altadena upended the lives of tens of thousands of residents and business owners.
Scenes like these, once rare, are becoming disturbingly routine. The impact can no longer be ignored—especially by small business owners who often operate on the edge, where one setback can spell collapse.
As much as we want to ignore it, unprecedented disasters are now a clear and present danger. Businesses must adapt or face the consequences.
Why Business Failure Is So Common
The numbers are stark. About 25 percent of businesses in disaster zones never reopen, according to FEMA. And for those that do, the damage often lingers—customers stay away, revenue drops and recovery is slow.
Three weeks following the September 2024 Asheville flood, business in the commercial district was off 28 percent from the baseline period, according to the Fiserv Small Business Index, which measures impacts to consumer spending across small businesses supported by Fiserv payments technology.
The same is true in areas affected by the Los Angeles wildfires. Wind-fed flames leveled districts; those that survived still suffered massive losses. The Palisades wildfire dealt a devastating blow to the local economy, slashing business activity by 43 percent and triggering a staggering 90 percent plunge in small business sales this January. Just a few miles away, the Hurst fire chipped away at revenue too, with sales down 15 percent, based on the same index.
So how can businesses boost their odds of survival? It starts with preparation, not just for what’s likely, but for what feels impossible.
Prepare or Perish: How to Build Business Resilience
With the proper preparation, survival—even renewal—is possible.
The key lies in foresight. Businesses that invest in strategic planning, sound financial practices and strong community ties are far better equipped to weather the storm, literally. Resilience isn’t about sidestepping crises. It’s about meeting them head-on, with a plan in place and the agility to adapt.
In the aftermath of a disaster, it’s often those small businesses that had contingency plans, diversified revenue streams and supportive networks that not only reopen but find new footing. For them, disruption becomes a turning point, not a dead end.
But there are hard truths. Most business insurance is built for predictable risks, not catastrophic ones. Standard policies often exclude floods, earthquakes and other so-called “acts of God” that can wipe out years of effort overnight.
1. Plan Before It’s Too Late
Flood insurance often requires separate coverage through the National Flood Insurance Program (NFIP) or a private insurer. But here’s the catch: It can be costly, and there’s usually a 30-day waiting period before coverage begins. You can’t buy flood insurance while storm clouds are already on the horizon.
Beyond floods, business owners should review their policies for gaps in business interruption, equipment replacement and inventory loss.
2. Act Fast in the First 72 Hours
When disaster strikes, the difference between permanent closure and recovery often depends on what happens in the first 72 hours.
For small business owners, the path forward begins with documentation. Before cleanup starts, photograph and video every inch of the damage. These records are essential for insurance claims. Please also have photos of your business and key inventory lists from before the disaster. They’re just as important.
Act quickly. Contact your insurer immediately and use digitized records to speed up the claims process. If your physical space is still intact, secure it to prevent looting or further damage.
3. Secure Financial Lifelines
Once safety is addressed and insurance claims are underway, shift focus to financial survival. Emergency reserves and pre-approved credit lines can provide critical short-term relief. For longer-term support, federal programs like SBA Disaster Loans and financing through Community Development Financial Institutions (CDFIs) can offer lower interest options.
Local foundations, corporate relief programs and nonprofit organizations may also provide grants to help bridge early gaps in recovery funding.
4. Operational Agility
Adaptability matters. If you lose your storefront, look for temporary options like shared kitchens, coworking spaces or short-term leases. If you rely on a single supplier, diversify before you’re forced to. Cloud-based backups can preserve financial records and customer data even if your hardware is destroyed. Cross-train your staff so critical roles don’t stop when one person is unavailable.
5. Build a Strong Support Network
Recovery is nearly impossible without a strong support system. Stay connected to local chambers, industry groups and small business development centers. These networks often offer resources many business owners miss, including workshops, disaster counselors and updated relief programs.
Disaster may be inevitable, but collapse is not. The businesses that prepare today will be the ones still standing tomorrow.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.