Insurance considerations for extreme weather events

In the unfortunate event that a company or business suffers losses due to flooding, tornadoes, droughts, wildfires or hurricanes, insurance policyholders should review their policies in advance so they can be prepared to take full advantage of available coverage. (Carolina K. Smith/Adobe Stock)

As commercial policyholders dry out from the havoc wreaked by this year’s uncharacteristically cold winter in Texas, the relative “calm before the storm” that comes in the springtime provides an opportunity to assess insurance coverage for weather-related events. In connection with that assessment, this article provides a brief overview of both the coverages that may respond to extreme weather events, and insurance-related legal issues that may arise out of those events.

According to the National Oceanic and Atmospheric Administration, there were 22 separate billion-dollar weather and climate disasters in the United States alone in 2020. Losses from the February 2021 winter storm in Texas are estimated to be in the $10-$20 billion range. With a staggering rise in extreme weather events around the globe, there is no indication that the coming years will be any different, or any less expensive.