Insurance Coverage to Help Your Healthcare Practice Weather Any Storm

 

With Los Angeles burning and record-breaking hurricanes and floods still in recent memory, you’ve likely thought about what would happen to your healthcare business if a natural disaster struck near you.  

Natural disasters such as hurricanes, floods, wildfires and earthquakes have a devastating impact on healthcare business owners, who are then called to serve their communities at the same time.

While some areas of the country are more prone to natural disasters, no area is immune in 2025. Following are some of the 2024 billion-dollar disasters that came from multiple categories:

• 2 winter storm events in the northwest, central and southern U.S.
• The South Fork Fire in New Mexico 
• Southern, eastern and northwestern U.S. drought and heat wave
• Upper Midwest flooding 
• 6 tornados
• 5 tropical cyclones, including Helene and Milton 
• 11 severe weather/hail events 

There were 27 individual weather and climate disasters with at least $1 billion in damages in 2024. Total costs added up to about $182.7 billion in damages.

For healthcare practice owners, the stakes are even higher, since disruptions can affect patient care and safety.

If you’re thinking about what insurance policies protect your healthcare business from a natural disaster, here’s what you need to know. 

4 insurance policies to protect your healthcare business in case of a natural disaster

1. Property insurance

Property insurance protects your business in case of all kinds of damage, whether it’s a storefront car crash or a storm. The policy safeguards against damage to buildings, medical equipment and furniture. 

If you have a brick-and-mortar practice, you likely already have a property insurance policy. Check what kinds of incidents your policy covers because many standard property insurance policies cover damage caused by wind, fire and hail but may exclude floods and earthquakes.

Key considerations:

• Ensure coverage limits are sufficient, especially if you’ve acquired new specialized medical equipment.
• Review policy exclusions for specific types of natural disasters.

2. Flood and earthquake insurance

Standard property insurance policies typically don’t cover flood and earthquake damage, so you likely need specific insurance policies for those natural disasters. This is crucial if your practice is located in a flood-prone or earthquake area, but it can also be helpful in other areas of the country. For example, if your practice is located on a basement level, the area may be prone to flooding from heavy rainfall. 

Just one inch of floodwater can cause up to $25,000 in damages, according to the Federal Emergency Management Agency (FEMA).

Key considerations:

• Check FEMA’s flood maps to assess your risk level and/or evaluate the likelihood of earthquakes in your region.
• Confirm the maximum amount the policy will pay for damages to the building and its contents.
• Find out if there’s a waiting period. Most policies have a 30-day wait.

3. Business interruption insurance

Whether your business is damaged or only indirectly affected by a natural disaster, business interruption insurance helps you recover from lost income and also covers operating expenses. The policy steps in if you face downtime due to damage or even power and water outages.

Key considerations:

• Ensure your policy accounts for potential extended closures.
• Consider additional riders for utility service interruptions.

4. Workers’ compensation insurance

Healthcare workers are essential during emergencies, but those same emergencies can make that work more perilous than usual. Workers’ compensation insurance provides coverage for medical expenses and lost wages if any of your employees are injured on the job.

Key considerations:

• Ensure policies cover injuries resulting from natural disasters.
• Provide employees with disaster training to reduce risks.

5. Umbrella insurance

An umbrella policy acts as a safety net, providing additional liability coverage beyond the limits of your standard policies. For example, if a flood or high winds cause a large exterior decoration to damage a neighbor’s property, your umbrella policy would likely cover you in the event of a lawsuit.

Key considerations:

• Review existing liability coverage to identify gaps.
• Tailor the policy to include risks specific to natural disasters.

Proactive Steps to Strengthen Your Healthcare Business’s Resilience

While insurance is essential, disaster preparation helps minimize risk and ensure you can continue providing care. Here are some proactive measures:

1. Create a disaster recovery plan for your business: Include protocols for evacuations, communication and patient care.
2. Backup files: Use cloud-based systems to ensure access to electronic health records (EHRs) and important business files during emergencies.
3. Conduct regular safety drills: Train staff to respond effectively to various scenarios.

Natural disasters are unpredictable and devastating, but the right insurance coverage and preparation can help mitigate financial and operational risks. 

For more information or to discuss your insurance needs, consult with an experienced insurance advisor who understands the unique risks faced by healthcare practices.

Simply put, most busy healthcare business owners are just one disaster away from losing the business they’re working so hard to build. Speak to an insurance advisor at CM&F Group to address any specific questions you have and ensure you have the coverage you need.