Small businesses are not immune to the increasing frequency and intensity of severe weather-related events. Even a lengthy power outage from a winter storm can be a threat to small businesses, leading to economic damage that is difficult to overcome.
“Winter risk is no longer
defined solely by snow accumulation or short-lived disruptions,” writes Monica Ningen, CEO of Swiss Re’s US P&C business, for this issue’s Closing Quote (see page 50). “Today’s storms bring a combination of extreme cold, heavy precipitation, ice, flooding, power outages, and extended recovery timelines.”
Research suggests the primary risk facing small businesses after natural disasters is an extended business disruption which can sometimes lead to permanent closure. The longer it takes for a business to recover from a disastrous event, the more likely that business is to fail.
The trend of billion-dollar natural disaster events is continuing. Billion-dollar events increased from 6.7 events per year from 2000-2009, to an average of 23 events per year from 2020-2024, according to the National Centers for Environmental Information. Insured losses from natural catastrophes topped the $100 billion mark in 2025 for the sixth consecutive year. While the main driver of loss in 2025 stemmed from the Los Angeles wildfires, severe convective storms remain a major global loss driver, reports Swiss Re Institute. Global insured losses from severe convective storms alone were $50 billion last year, making 2025 the third costliest year after 2023 and 2024.
So, what can small businesses do to prepare for the next disaster, and how can their insurance partners help? To safeguard against disastrous scenarios for the small business client, insurance partners should make sure that before disaster strikes, their clients have insurance coverage that is adequate and preparedness plans that will ensure business continuity.
Small Business Risks
The small business insurance market, as well as the personal lines sector, have both entered 2026 in a stable position, according to Amwins’ Small Business and Personal Lines Outlook. After years of disruption and rate escalation, market conditions have begun to normalize with average rates softening in some property classes, and capacity and underwriting appetite returning to segments that had become constrained. But natural catastrophe exposures remain key areas of concern, especially in highly populated areas, the report said.
“Severe convective storms, once principally confined to ‘tornado alley,’ have become a nationwide concern. In response, underwriters are deploying detailed geographic modeling to assess micro-region risk (i.e., Los Angeles hill area). Carriers are also increasing scrutiny of roof age, considering it even more important than building age in how a property responds to a wind event,” the report said.
Like much of the personal lines market, the small business owners’ insurance market faced severe frequency and severity of natural disasters over the last several years, William King Sr., director of commercial underwriting at Progressive Insurance, told Insurance Journal. “As a result, geographically disaster-prone areas experienced higher premiums, limited availability, and/or increased use of cost sharing terms from insurers,” King said, adding that because small businesses often operate with tighter or limited safety nets, closing after a natural disaster can be challenging.