This is a big topic with competing viewpoints. Perhaps a more beneficial approach is to focus on associated risks and leave arguments of anthropogenic vs natural causes to others. Businesses care most about the bottom line, and, in that regard, climate change impacts are clear. The growing awareness of this issue and its risks in business operations provides an opportunity for those in environmental insurance to help. Addressing the risks associated with the climate is increasingly prudent, regardless of industry or commercial activity.  

Risks include dramatic increases in localized rainfall intensity, which generates flooding in areas previously considered safe from flooding. Coastal areas are experiencing high-tide, sunny day flooding. Other areas are suffering from extended periods of heat, leading to drought and, in some areas, added risks such as wildfires. The National Oceanic and Atmospheric Agency tallied 28 U.S. disasters that totaled more than a billion dollars in damages in 2023—a new unwelcomed record.

Source: NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2024).

On a positive note, decreases in the cost of data analysis coupled with the near-universal use of smart phones and other similar, inexpensive tech devices are allowing large amounts of new, accurate data collection across the US. In turn, this increasingly augments high-cost, sophisticated data collection using satellites. Today’s satellites are both government and privately owned, and collected data is being analyzed to show weather-related risk is an exposure with increasingly heightened probabilities, including damaging secondary perils like severe convective storms. 

Climate Change?

Businesses and many authorities have taken notice of the benefits of climate resilience.  Miami-Dade County is investing in infrastructure improvements with raised roads, new pump stations, and construction at higher elevations when practicable. 

New York City is working on several resiliency measures. Private parties are evaluating runoff patterns on properties to improve stormwater flow, relocating critical components to higher ground, and building other infrastructure with sturdier protections against hail and other damaging wind driven debris. 

Has your corporation or clients started planning for weather disruptions? How vulnerable is your business to weather interruptions? Numerous online resources can help start one in taking steps to help protect employees, capital assets, and evaluation of critical supply chains. Addressing climate hazards today will help ensure one’s business can continue running in the aftermath of a disruption tomorrow. It’s increasingly an area deserving of attention and environmental insurance is one tool in the toolkit that can help. Make resiliency planning a 2024 priority.

Paul is a Risk Engineering Manager with Great American's Environmental Division. He brings over 30 years of environmental and insurance consulting experience to Great American. Paul's background includes hydrogeology and finance degrees with extensive experience in greenfield, water supply development and brownfield redevelopment. He provides technical support and training to our underwriters and is based out of our New York office.

References:

1.      https://www.ncei.noaa.gov/access/billions/

2.     https://www.miamidade.gov/global/economy/resilience/sea-level-rise-flooding.page

3.     https://www.nyc.gov/site/dep/environment/climate-resiliency.page

4.     https://toolkit.climate.gov/steps-to-resilience/steps-resilience-overview

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