Climate risks are no longer ‘one-off’ events, they’re quickly becoming more common. Insurance Bureau of Canada (IBC) figures show that severe weather-related insured losses in Canada reached a record $9.4 billion in 2024, compared with $3.8 billion in 2022. And while losses fell in 2025, they still exceeded $2.4 billion, making it the tenth-costliest year on record for severe weather-related insured losses in Canada.
These risks make preparation essential. Kyle Russell, Manager of Technical Risk Services at Echelon Insurance, says businesses should treat flooding, wildfires, severe convective storms, hurricanes, and sewer back up as ongoing operational risks – not isolated events.
“Flooding remains the most common weather hazard for Canadian businesses and one of the costliest, contributing to property damage, business interruption, and community impacts,” he told IB. “Climate change is driving heavier rainfall, stronger storms, shifting weather patterns, and rising sea levels, increasing flood risk across Canada. Severe storms are also becoming more costly. Hailstorms, for example, can cause extensive damage to roofs, windows, HVAC systems, solar panels, vehicles, and building exteriors as severe weather becomes more frequent and intense.”
And that exposure is particularly significant given that the federal government describes flooding as Canada’s most common and costly natural hazard, responsible for approximately $800 million in insurable losses annually over the past decade.
Wildfire exposure continues to grow in many regions, according to Russell, creating risks to buildings, operations, employee safety, and business continuity. Escalating catastrophe activity around the world has also contributed to a tightening insurance market.
“Many organizations are facing higher deductibles, reduced capacity, more restrictive coverage terms, and increased underwriting scrutiny,” he added. “As a result, businesses that can demonstrate strong risk management, resilience planning, and business continuity measures are often better positioned to secure favorable coverage terms and capacity.
“Beyond physical damage, prolonged business interruption is a major risk. Lost revenue, customer disruption, supply chain issues, reputational impacts, and extended recovery periods can exceed the cost of direct property damage. A single climate-related event can disrupt operations for weeks or months if a business is not prepared.”
Businesses cannot prevent severe weather, but they can influence how quickly they recover. Russell recommends starting with prevention and preparedness well before an event occurs.
“You can’t stop a storm, but you can control how quickly your business can recover,” he told IB.
“Preparation should begin long before severe weather is forecast. Businesses should conduct risk assessments, identify critical assets and operations, establish a business continuity team, and develop a comprehensive business continuity plan that outlines response and recovery procedures. Regular reviews and updates of these plans are essential.”
A business continuity plan provides the foundation, but it must translate into clear action when severe weather approaches. Russell recommends taking the following steps before conditions worsen:
“Businesses should also ensure critical fire protection systems remain fully operational. Impairment of sprinkler systems or fire protection equipment during a severe weather event can dramatically increase loss severity and business interruption exposure,” added Russell.
When a flood, wildfire, or storm strikes, the first priority in these situations is always the same – life safety.
As Russell told IB, businesses should account for all staff, ensure personnel are safe, and avoid entering damaged buildings until structural integrity has been assessed. Downed power lines, gas leaks, and other hazards should be treated as active dangers and reported immediately.
“Once the scene is safe, organizations should activate their incident response procedures, assess the severity of the event, document damages, and identify critical business activities that have been disrupted,” he added. “An event log should be established, key internal and external stakeholders should be notified, and responsibilities should be assigned to the incident response team.
“Property damage should be thoroughly documented using photographs and video before cleanup begins. Businesses should contact their broker or insurer as soon as possible and be prepared to provide policy details, damage descriptions, and supporting documentation.”
After addressing immediate hazards, businesses should act quickly to limit secondary damage. This may include removing standing water and beginning drying procedures, deploying dehumidifiers and restoration contractors, and protecting exposed roofs, windows, entrances, and exits.
“Regular communication with employees, customers, suppliers, contractors, and other stakeholders is also critical during the early recovery period to maintain confidence and support business continuity,” added Russell.
And, in order to not only attend to existing damage but prevent further harm, businesses should look at strengthening physical resilience by investing in risk mitigation measures. These include elevating critical assets above flood-prone areas, installing sump pumps, backup power systems, and backflow prevention devices, upgrading roofs, windows, and exterior building components to withstand hail and wind damage, and maintaining drainage systems and building envelopes.
“Technology and data resilience are equally important,” advised Russell. “Businesses should maintain secure cloud-based backups, implement robust cybersecurity and IT recovery measures, and ensure critical operational data can be restored quickly following a disruption.”
Russell went further here, adding that organizations should also diversify suppliers, identify alternate operating locations, maintain emergency agreements with contractors and vendors, and regularly train employees through emergency exercises and scenario-based drills.
“The question is no longer whether severe weather will affect a business, but whether the organization is prepared to recover,” he told IB. “Ultimately, the most resilient businesses treat climate risk as an ongoing operational issue rather than a seasonal concern.
“Severe weather may be unavoidable, but prolonged disruption is not,” Russell says. “Businesses that make climate risk part of everyday operations and invest in preparedness, employee training, infrastructure upgrades, business continuity planning, and regular risk assessments are better positioned to protect their people, property, and profitability when severe weather strikes.”
About Echelon Insurance
Echelon Insurance was founded in 1998 and became a member of CAA Club Group of Companies (CCG) in 2019. As a leading Specialty insurer, Echelon works closely with our Broker partners to provide Personal and Commercial insurance solutions to protect Canadian families and businesses.
For more information about Echelon, visit www.echeloninsurance.ca.
This article was created in partnership with Echelon Insurance
