The frequency and severity of natural disasters and extreme weather are on the rise. In May, the planet’s warmest on record, temperatures across Florida were significantly higher than normal. In West Palm Beach, temperatures were 5.5 degrees higher than normal and the Panhandle experienced temperatures 1.5 degrees higher than average. 

Hurricane season, too, is expected to be harsher than normal. According to the National Oceanic and Atmospheric Administration’s (NOAA) forecast, there could be between four and seven major hurricanes surpassing 111 miles per hour over the course of the six-month Atlantic hurricane season. 

The reality is that 2024 is not an anomaly. Since 1980 there have been 387 extreme weather events – including everything from floods, hurricanes, droughts, and wildfires – that have resulted in over $1 billion in damages. While individual years vary in the volume and damage caused by extreme weather, the upward trajectory over the past four-plus decades is impossible to miss. 

For small business owners, the risk that extreme weather will impair, or halt company operations and revenue is one that can’t be ignored. In fact, a study by the Federal Reserve Banks of San Francisco, Dallas, Richmond, and New York found that 96 percent of small businesses in areas designated by the federal government as disaster areas lost revenue and another 64 percent lost physical assets. 

The optimal time to financially plan for potential financial and operational disruptions to your business is before the heat settles in or a hurricane makes landfall. Here are some essential steps to take to ensure your company stays productive and connected during even the most severe natural disaster. 

One of the first items on a business owner’s checklist when launching a small business is to secure insurance. This is especially true when a company owns or rents property, like office space and equipment. But a set-it-and-forget-it attitude towards business insurance is not sufficient to be fully prepared for the risks posed by extreme weather. Be proactive and review what your current policy covers and does not cover. 

For instance, damage from floodwater is not typically covered, and just one inch of floodwater can cause $25,000 in damage. Fully vet your insurance policy based on the extreme weather risks most likely in your region and consider making additions – such as securing a policy from the National Flood Insurance Program – to ensure you’ll have the financial resources to get up and running quickly after a storm. Business interruption insurance can also provide income and cover your operating expenses if your company is forced to temporarily close. 

Forecasting every detail of how a storm or extreme weather event will impact your company’s operations is impossible. However, it is straightforward to anticipate and plan for how your company should respond during and after an extreme weather event. 

This is best accomplished by creating a business continuity plan, which should outline the specific actions and responsibilities your organization and employees should take. A business continuity plan establishes how a company can mitigate impending impacts from an event while also ensuring the business continues operating as normally as possible after disruption. Business continuity plans also need to address things like the information technology (IT) requirements of employees if they must work remotely, responsibilities for contacting customers and vendors, and how data and intellectual property will be protected.

Documented emergency (or crisis) response planning should be part of your business continuity plan and is meant to save valuable time when a disaster occurs by establishing how employees will communicate, what potential evacuation routes are, responsibilities for communicating with first responders, and other essential actions that can protect lives and property. 

Business continuity plans should include tools so that critical financial obligations can be met without disruption. 

Business critical data can be digital, or paper documents, or a combination of the two. Regardless, successfully navigating a disruption demands protecting and securing intellectual property, customer contacts and history, and other information so that it is both safe and can be accessed easily. This can be accomplished in any number of ways, including storing copies of documents in multiple locations and taking advantage of cloud storage backup services. 

The process of identifying critical data and documents – and expanding your definition of what is critical – has benefits in the aftermath of an extreme weather event improving the resilience of your organization. 

Having photographs of business equipment, furniture, and property deeds readily available can speed up the insurance claim process by providing proof of losses which insurance companies may need to compensate you quickly.

The Federal Emergency Management Administration (FEMA) reports that 25 percent of businesses don’t reopen after being hit by a natural disaster. There can be many reasons for this, but finances inevitably play a big role. Or, to put it simply, reduced cash flow and insufficient access to the credit needed to pay salaries and vendors – let alone to cover equipment and office space before insurance kicks in – can doom a small business. Which is why it is so important to open and fund a savings account to cover expenses while your company recovers from a natural disaster. 

BankUnited offers a business savings account to help safeguard your savings. 

Business disruption during and after extreme weather events can take many forms. If a storm is harsh enough, you may be unable to visit your bank branch or access cash at an ATM. Fortunately, this disruption doesn’t have to hamper your ability to access cash and pay bills and salaries. Simply downloading the BankUnited app and setting up backup payment options that kick in during and after an emergency is all you need to keep your business finances running smoothly with your smartphone and laptop.

Extreme weather events are a growing risk to many small businesses. But like other risks, advanced planning and the right tools are the best way to keep your company running smoothly regardless of the disruption.