Extreme weather does more than damage buildings. Hurricane Ian generated between $50 billion and $65 billion in insured losses when it struck Florida in September 2022, according to Swiss Re Institute, making it the second-costliest insured event on record after Katrina. Much of that damage ran through supply chains and distribution networks hundreds of miles from the storm.
For risk managers and business owners, that distinction reframes the problem. Extreme weather is a supply chain issue, a workforce concern, and a coverage gap problem, rather than just a property one. Jeff Lang (pictured), senior vice president and California platform leader at Trucordia, explains what a genuine year-round approach looks like.
Most businesses consult weather forecasts when a storm approaches. By then, Lang argues, the window for the decisions that matter has already closed.
"The biggest mistake businesses make is treating weather as an event instead of an ongoing business risk," he said. "By the time a storm is on the radar, the important decisions should already be behind you."
The companies that navigate major weather events with minimal disruption are not fortunate, Lang argues. They are the ones that mapped critical suppliers, established backup plans, defined decision-making authority, and tested operational continuity under pressure.
Winter Storm Uri in February 2021 illustrates the point. The storm's most significant business damage had nothing to do with buildings.
"Many businesses weren't shut down because their buildings were damaged," Lang said. "They were shut down because power failed, transportation stopped, suppliers couldn't deliver, and employees couldn't work. That's business continuity, not property damage.
"Extreme weather isn't just something that happens to your buildings. It happens to your entire business."
That distinction has direct implications for how risk managers and business owners approach weather planning, Lang notes. It shifts the question from physical protection to operational resilience.
"Today, weather risk goes far beyond protecting buildings. It affects your workforce, your supply chain, your technology, transportation, utilities, and ultimately your ability to serve customers. That's why resilience has become a leadership issue, not just a facilities issue."
Most business continuity plans are built to protect a building. Lang argues that's the wrong starting point.
"The biggest gap is that too many companies still build continuity plans around their own facilities," he said. "That's no longer where business fails."
Disruption today, Lang explains, moves through supply chains, transportation networks, utilities, and labor markets. A fully operational building offers limited protection if suppliers cannot ship or employees cannot reach work.
"Hurricane Ian proved that," he said. "Businesses hundreds of miles from the storm experienced delays because suppliers, ports, and distribution networks were disrupted. The lesson is simple: your biggest risk may not be where you're located. It may be somewhere deep inside your supply chain. Business continuity doesn't stop at your front door anymore."
The problem runs deeper than planning gaps, Lang notes, adding that many continuity plans have never been tested at all.
"They look good in a binder, but the first tabletop exercise usually exposes gaps in communication, decision-making, and operational dependencies."
Manufacturing, transportation, construction, healthcare, retail, and food distribution are among the most exposed industries, according to Lang. All depend on interconnected supplier and logistics networks that extreme weather can disrupt at any time of year.
Risk managers have long relied on historical loss data to understand future exposure. Lang says that approach has a growing blind spot.
"Historical data still matters, but it can't be the only input anymore," he said. "For years, companies looked backward to understand future risk. That worked when weather patterns were relatively predictable."
Today, severe events are occurring in places that were not traditionally considered high-risk. The question risk managers need to ask has shifted, Lang argues.
"Risk managers need to ask a different question. Not 'What happened before?' but 'What happens if this happens tomorrow?'"
That shift requires a different toolkit. Lang points to catastrophe modeling, scenario planning, geospatial analytics, and stress testing as tools that must supplement historical data.
His examples are grounded in observed market behavior. Wildfire smoke has disrupted operations hundreds of miles from the fire itself. Flooding has hit areas that were not historically considered flood-prone.
"The environment is changing, and our assumptions have to change with it," Lang said. "The organizations that win won't be the ones that predict every event. They'll be the ones that are prepared for uncertainty."
Many businesses assume their insurance program will carry them through a weather disaster. Lang says that assumption is where the trouble starts.
"One of the toughest conversations we have is after a loss, when a business discovers the coverage they thought they had isn't the coverage they actually purchased," he said. "Weather-related claims are rarely as straightforward as people assume."
Coverage depends on policy language, exclusions, deductibles, waiting periods, and the actual cause of loss. Flood and contingent business interruption are two areas where expectations most often fail to match policy reality, Lang notes.
"Insurance is incredibly important, but it isn't a business continuity plan," he said. "It's one part of a much larger resilience strategy. The best time to discover a coverage gap is during a renewal meeting, not after a catastrophe."
For businesses that haven't stress-tested their plans, Lang's starting point is straightforward. Put the executive team in a room and walk through a realistic scenario.
"Assume you lose power. Assume your primary supplier is offline. Assume your employees can't get to work," he said. "Then ask one question: Now what? Who makes decisions? How do you communicate? Can customers still be served? What happens if the disruption lasts a week instead of a day?"
The exercises surface problems that are manageable before an event and far harder to address during one. Lang has seen companies discover their backup location sat in the same flood zone as their headquarters. Others found that one employee held critical knowledge no one else had.
"Business continuity isn't measured by the plan you wrote," he said. "It's measured by how your organization performs when the unexpected happens. A continuity plan is only as good as the first day you actually have to use it."
The stakes extend well beyond the immediate loss, Lang argues.
"The conversation has changed. Ten years ago, weather risk was largely about protecting physical assets. Today, it's about protecting the business itself. Buildings can be repaired. Customers may not come back. Supply chains take time to rebuild. Reputations can take even longer.
"The organizations that will separate themselves over the next decade won't necessarily experience fewer disruptions. Disruption is part of doing business today. The difference will be how quickly they adapt, recover, and continue serving their customers. Resilience has become a competitive advantage. The companies that recover the fastest will be the ones that lead their industries."
