Published: 8 April 2025
Tips to protect your business from climate risks
New Zealand has faced some major climate-related disasters in recent years, including the 2023 Auckland floods and Cyclone Gabrielle. Currently, around 750,000 residents and 500,000 buildings are now considered at risk due to their proximity to flood-prone rivers or coastal areas*.
To protect themselves from climate change risks, businesses can take several steps that may help to enhance resilience and ensure continued operations despite the increasing severity of climate-related events.
Here are some key strategies.
- Risk mapping and assessment: Conduct a thorough assessment of potential climate-related risks, such as flooding, storms, heatwaves, or wildfires, that may impact your business. This includes evaluating the location of your property and understanding local environmental risks (e.g., flood zones, coastal areas).
- Research risk zones: Use hazard and GIS maps from local councils to check if your business property is in a floodplain, coastal erosion area, or high-risk earthquake zone. Advise your insurer of any Section Notices on the property title that relate to natural hazards.
- Flood-proofing and resilience: For businesses in flood-prone areas, invest in flood barriers, elevated floors, and waterproofing measures. Consider using flood-resistant materials in construction and renovation projects.
- Storm-resilient infrastructure: Reinforce buildings to withstand high winds, especially in cyclone-prone areas. This may include stronger roofing, windows, and structural reinforcements.
- Energy efficiency: Improve energy efficiency through insulation, energy-efficient lighting, and renewable energy sources to reduce dependence on fossil fuels and mitigate climate change impacts.
- Disaster preparedness: Develop or update your Business Continuity Plan to account for climate-related disruptions. This should include steps for protecting employees, safeguarding physical assets, and maintaining operations during extreme weather events or natural disasters.
- Backup plans for operations: Ensure that backup suppliers, alternative locations, and remote working options are available in case of disruptions caused by climate-related events (e.g. flooding, power outages).
- Communication strategies: Establish clear communication plans to notify employees, customers, and stakeholders about climate-related disruptions and recovery efforts.
- Adequate insurance for climate risks: Review your insurance policies to ensure they cover climate-related risks, including flood damage, fire, and property damage.
- Business interruption insurance: Make sure you have adequate business interruption coverage to protect against revenue loss caused by climate-related disruptions. It's also important to evaluate if your suppliers or clients may have increased exposure and inform your Broker about it.
- Tailored coverage: As climate risks evolve, review your insurance regularly to ensure it accounts for emerging climate-related risks in your area. Consider specialised insurance for extreme weather events or long-term climate risks like sea-level rise.
Protecting your business from climate risks in New Zealand requires proactive planning and preparation. By implementing strategies like the above and securing comprehensive insurance coverage, you can reduce the impact of extreme weather events. Regularly engage with your Rothbury broker to ensure your coverage evolves in line with the latest climate risks.
* Government plans new law for climate resilience | Insurance Business New Zealand
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or professional advice. For specific advice tailored to your situation, please consult with a qualified professional.