Skip to main content
Marsh logo

Article

7 strategies to mitigate evolving severe weather-related risks

For retailers, restaurants, wholesalers, food and beverage companies, severe weather events can lead to worker shortages and supply chain disruptions.

05/15/2025 · 8 minute read

From tornadoes, to wildfires, to severe storms and flooding, severe weather-related events are becoming more frequent, bringing devastation to individuals, businesses, and communities. For retailers, restaurants, wholesalers, food and beverage companies, and agricultural businesses, severe weather events can lead to worker shortages, supply chain disruptions, and extensive property damage.

According to the National Oceanic and Atmospheric Administration (NOAA), the 27 billion-dollar disasters that impacted the US in 2024 resulted in $182.7 billion in damages. This exceeds both the average annual cost and number of events for the five years ending in 2024 and reflects a broad pattern of substantial climate change risks that require effective strategies to respond and recover.

Many communities are still recovering from last year’s tornadoes, wildfires, and severe flooding, even as preparations are underway for the 2025 Atlantic hurricane season, which is expected to see above-normal activity. It is essential for retailers, restaurants, and food and beverage companies to take stock of their existing preparedness, response, and recovery plans and make the needed changes to remain resilient before, during, and after a severe weather event. This is especially critical for retailers and food and beverage companies that play a crucial role in supporting communities in the aftermath of a disaster, providing food, water, and emergency supplies to aid in rebuilding and recovery. 

Key issues for retailers, restaurants, and food and beverage companies

As the frequency and severity of weather events escalate, businesses face a series of evolving risks. These typically fall into four major categories:

Property risks

Severe weather can cause extensive damage to physical assets, including buildings, equipment, and inventory. Retailers and restaurants often bear the brunt of damage, which can lead to costly repairs and prolonged business interruptions. For instance, flooding can compromise inventory, while high winds can cause significant structural damage — both can lead to significant business interruption. The financial implications of property damage can be staggering, particularly for small and medium-sized enterprises that may lack the resources to recover quickly.

Supply chain disruptions

The interconnected nature of modern supply chains means that severe weather in one region can ripple across the globe. Wholesalers, retailers, and restaurants may struggle to source products if suppliers are impacted by storms, flooding, or other significant weather events. Additionally, transportation routes may be compromised, leading to delays in deliveries and increased costs. It is important for retailers, restaurants, and food and beverage companies to review their current supply chains to identify any vulnerabilities and put structures in place that can position them to pivot quickly and identify alternative suppliers or logistics solutions to mitigate disruptions.

People challenges

Whether they need to care for injured family members, tend to their own damaged properties, or encounter transportation difficulties, people in areas affected by severe weather may not be able to get to work, leading to staffing challenges. Further, the stress and anxiety associated with severe weather events may lead to decreased morale and productivity. 

Challenges securing adequate coverage

As the frequency and intensity of severe weather events increase, so do the challenges associated with insuring against these risks, which can lead to higher premiums and stricter underwriting criteria, particularly in high-risk areas.

Extreme heat implications require careful mitigation strategies 

While storms, tornadoes, and wildfires often dominate headlines, extreme heat can have a devastating impact on employees. As temperatures rise, the risks associated with heat exposure become increasingly pronounced. And this risk is increasing — between the 1960s and the 2020s, the frequency, intensity, and duration of heat waves, as well as the length of the season, have trended upwards.

Aside from the affected individuals, extreme heat is also a financial challenge. In the US alone, the annual economic losses from extreme heat are estimated to be around US$100 billion and could double by 2030 and quintuple by 2050 unless climate change is addressed.

Considering the outdoor nature of their jobs, agriculture workers are among the most exposed to extreme heat. Transportation workers, including truckers — essential to deliver needed supplies for restaurants, retailers, and food and beverage companies — and those unloading deliveries are also regularly spending time outdoors, sometimes during the hottest times of the day. 

While the risks of extreme heat can be particularly acute on outdoor workers, indoor workers are not immune. Some indoor environments, such as warehouses and kitchens, can become dangerously hot when climate control systems are not operating effectively. 

Whether workers are outdoors or inside, extreme heat could lead to fatigue, dehydration, decreased concentration, and an increased risk of heat stress, all of which can contribute to reduced productivity and increased absenteeism. Further, heat-induced fatigue could become a safety concern for employees using heavy equipment. And without the proper equipment and training, extreme heat can be deadly — one study found that almost three-quarters of fatal heat-related illnesses take place during the first week on the job, underscoring the importance of extensive training regarding extreme heat and the need to acclimatize to difficult working conditions.

It's important to note that the Occupational Safety and Health Administration (OSHA) is currently developing a federal standard aimed at protecting workers from heat-related injuries and illnesses in both indoor and outdoor working environments. OSHA is scheduled to hold an informal public hearing to gather input on its proposed rule — Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings — in June.

Building resilience to withstand extreme weather events 

Extreme weather events can have severe repercussions on communities and businesses. As the frequency and severity of these events escalate, businesses across various sectors should take action to prepare their organizations to remain resilient before, during, and after an event. These may include:

1. Enhance property resilience

Invest in building upgrades that meet or exceed current codes for wind, flood, and fire resistance. This may include reinforcing roofs and securing outdoor equipment, installing flood barriers, and using materials designed to withstand severe weather.

2. Identify supply chain risks

Develop relationships with multiple suppliers and logistics partners to reduce reliance on any single source. It is important to have visibility throughout the supply chain to uncover potential vulnerabilities beyond your tier 1 suppliers. Marsh McLennan’s Sentrisk, for example, can help organizations identify unknown vulnerabilities, potentially improving your ability to continue operating even when one supplier is affected by severe weather.

3. Use technology and data analytics

Leverage technology to monitor weather patterns and assess risks in real-time. Data analytics can help you make more informed decisions about inventory management, staffing, and supply chain logistics in anticipation of severe weather. When a severe weather event is expected, consider stockpiling needed supplies ahead of time to counter potential supply chain disruptions during and after an event. Keep in mind, however, the impact potential power outages may have on perishable items and ensure that your backup generators are operating effectively. It is also prudent to consider booking third-party cold storage facilities.

4. Develop comprehensive emergency plans

Create and regularly update emergency response plans that outline procedures to protect employees, secure property, and maintain operations during severe weather events. Conduct regular drills to ensure that all employees are familiar with these plans and are aware of their roles and responsibilities before, during, and after an event.

5. Invest in employee safety and well-being

Implement measures to protect employees during extreme weather, such as providing flexible work arrangements, and offering support for those affected by severe weather events. In areas affected by extreme heat, ensure that employees have access to cool water and shaded areas or air-conditioned spaces in which to take regular breaks. For those that must spend time in hot conditions, consider investing in wearable heat stress monitors that can alert the employee to signs of stress. Personal protective equipment with built-in cooling systems or clothing made of moisture-wicking fabric can improve employees’ comfort.

6. Enhance employee training and awareness

Develop comprehensive training programs intended to educate employees about the potential impacts of extreme weather, including the signs and symptoms of heat-related illnesses. Encourage ongoing communication about health concerns and train managers and supervisors to identify potential warning signs and take immediate action. Especially if you have teams working in remote areas, it is prudent to ensure that employees have first aid skills to help colleagues who are injured or fall ill while waiting for emergency response.

7. Engage with insurers

Work closely with insurers to understand coverage options and how they can be expected to respond to the risks faced. Regularly reassess property values and coverage limits to determine whether they reflect current market conditions and align with your risk appetite.

The increasing frequency and severity of severe weather events present significant challenges for retailers, wholesalers, restaurants, and food and beverage companies. By understanding the risks and implementing proactive strategies, businesses can better position themselves to withstand severe weather events and ensure long-term resilience. As the climate continues to change, the importance of preparedness and adaptability will only grow.

For more information on the potential impact of severe weather on your business and actions that you can take to mitigate your risks

Contact us

Related insights

Placeholder Image

Article

Evaluating business interruption in a nuanced retail landscape

12/16/2024
Retail Warehouse full of Shelves with Goods in Cardboard Boxes, Workers Scan and Sort Packages, Move Inventory with Pallet Trucks and Forklifts. Product Distribution Delivery Center.

Article

Retail supply chain risk: Why uncovering the truth about your tiers matters

12/12/2024
Hand of customer choosing clothes in a clothing store

Article

Explore safety best practices from new retail industry study

06/26/2024
ships; stack; logistic; loading; hong kong; harbor; developed; commerce; container; aerial view; background; boat; business; cargo; commercial; construction; containers; crane; delivery; dock; dubai; export; freight; global; import; industrial; industry; infrastructure; international; japan; logistics; port; sea; ship; shipment; shipping; singapore; storage; technology; terminal; top; trade; traffic; transport; transportation; truck; unloading; vehicle; vessel

Article

3 major supply chain risks retail, food and beverage companies must navigate

12/06/2023
View more