Environmental Risks Following Natural Disasters

In the aftermath of a natural disaster, immediate concerns often focus on property damage, injuries, and business interruptions. However, even after the clean-up process, businesses can still face significant risks, including health and safety hazards, financial losses, and reputational damage.

Employers must also consider the environmental effects of these events, especially since traditional insurance policies may limit or exclude related coverage. By understanding the key environmental risks that arise post-disaster, business owners can effectively develop strategies to address them.

Types of environmental risks

Multiple situations can complicate the recovery process for businesses and communities. Natural disasters can create conditions that result in environmental hazards, such as:

Mold

Severe weather events, such as floods and hurricanes, can cause water to get into your building and lead mold growth. When materials like drywall and wood become wet, it creates environments where mold can thrive.

According to the Centers for Disease Control and Prevention, mold can cause many adverse health effects, including respiratory problems, burning eyes, or skin rashes. Individuals with asthma, mold allergies, weakened immune systems, or chronic lung diseases may experience more severe reactions and potentially develop infections after mold exposure.

Spills, leaks, and other toxic releases

Infrastructure made from hazardous materials can be severely damaged during a natural disaster, leading to toxic building debris. Specifically, storage containers holding harmful chemicals can cause contaminated waste products to get out into the environment. This can be harmful by polluting the surrounding water, air, and soil.

Business properties built on historically contaminated grounds (e.g., Superfund sites) are at an elevated risk of toxic releases due to the nature of those areas, even if their operations typically do not generate hazardous materials.

Fire byproducts

Fires associated with natural disasters can create poor air quality in the surrounding communities. When a severe storm triggers an electrical fire or a wildfire begins to spread, it can incinerate materials within buildings, releasing potentially toxic fumes.

Additionally, firefighting efforts may involve chemicals containing per- and polyfluoroalkyl substances (PFAS) or other harmful agents to extinguish the flames. Known as “forever chemicals,” PFAS do not break down, creating further health and environmental risks.

Disruption of waste management systems

Natural disasters can disrupt or overwhelm waste management systems due to the extensive damage and debris generated. For example, sewer systems may not operate properly, causing health risks, or waste removal services may not be able to function, resulting in the buildup of hazardous material.

Reduce environmental liability

Businesses must understand their environmental liabilities to safeguard against potential risks from natural disasters. Proactively identifying potential hazards and implementing preventive measures can ensure that companies can protect their operations and stay in compliance.

The following strategies can help reduce risks associated with natural disasters:

• Conduct thorough environmental risk assessments to identify potential threats and vulnerabilities, including those created by operations, building materials, chemical storage, and waste.
• Establish and regularly update risk management plans that address immediate and long-term environmental hazards.
• Build and maintain infrastructure with a focus on resilience and sustainability to withstand the impact of natural disasters and lessen potential environmental impacts.
• Prevent pollution by eliminating or reducing the use of hazardous materials, modifying pollution-creating processes, investing in sustainable technologies, and improving waste management systems.
• Provide training and education to employees on proper handling, use, and storage of hazardous materials.
• Stay informed of relevant environmental regulations and laws applicable to the business and ensure compliance.
• Secure insurance that specifically covers exposures and potential liabilities arising from environment-harming incidents, including coverage for property damage, third-party injuries, and costs to clean the area impacted by the event.
• Regularly review and update insurance policies to align with business changes and the evolving risk landscape.

In the wake of natural disasters, businesses face numerous challenges. By understanding different environmental risks that can arise, companies can mitigate potential vulnerabilities and safeguard their operations. A proactive approach to preparation is key to reducing liability and fostering a safe, sustainable recovery for the business and its surrounding environment.

For further insights into effectively responding to environmental risks, or to secure the right insurance, contact a trusted advisor.