Businesses Back Stronger Standards for Climate-Resilient Buildings
Study finds commercial insurance clients say they are willing to invest $20,000 or more to defend against weather risks
Following a year marked by 28 disasters each costing at least $1 billion in damages, severe weather remains a top business concern for commercial insurance customers across the U.S. According to a new Agency Forward survey from Nationwide, business owners firmly believe improved building standards are necessary to protect their properties and most are willing to spend more to increase their buildings’ resilience.
Nationwide’s survey polled “commercial property stakeholders” – defined as commercial property owners, new construction builders and business owners – to gain an understanding of their concern around severe weather and their attitudes toward commercial construction standards.
Strong Building Standards are Vital for Protection
Big Picture: Property stakeholders agree on the importance of building code policy and the role it plays in climate readiness. However, many are concerned the current building codes in their region fail to fully account for the climate risks they face, especially in coastal states.
By the numbers:
- Nationally, 84% acknowledge the importance that building codes need to be improved
- In hurricane-prone states, nearly two-thirds (65%) are concerned about outdated building codes
- Virtually all (99%) agree that complying with current building codes is vital to protect their properties against weather
Why it matters: Commercial property stakeholders are increasingly concerned about climate risk and the high costs associated with recovering from severe weather events.
- 36% of property stakeholders, and 59% in hurricane-risk states, have suffered damage from natural disasters in the past five years.
- Of those, approximately half (49%) say their recovery took between four to six months and cost between $20,000 and $50,000.
What you should know: Commercial customers say they are willing to invest to better protect their properties from weather damage, especially those in hurricane and wildfire-prone states.
- More than half (53%) say they would be willing to spend more to increase their structure’s resiliency against weather, with a median investment of $20,000.
- This jumps to 66% in hurricane-risk states and 57% in wildfire-risk states
- Another 52% (66% in hurricane-risk states) report already building/repairing their properties to standards above current code requirements.
What we’re saying: “Climate risk is reshaping the protection needs of businesses, with severe weather being a year-round and widespread concern,” says Mark Berven, President and COO of Nationwide’s Property & Casualty business. “A collective approach involving insurance, proactive risk management, and robust building standards is crucial for resilience as climate impacts persist. Many of our commercial clients are taking extra steps to prepare their properties for severe weather events, but they can’t do it alone. The industry must continue to advocate for strong building codes to safeguard our communities and property investments.”
Nationwide Advocates for the Adoption of Modern Building Codes
As a founding member of the Insurance Institute for Business and Home Safety (IBHS), Nationwide advocates for the mandatory adoption and uniform enforcement of statewide building codes as well as enforceable standards for permits, inspections and building code inspector licensing and training.
IBHS believes strong, enforceable building codes are the simplest and most effective way to help protect property, reduce damage, save lives and lessen the burden for post-catastrophe aid.
“Our research shows the business community is behind these efforts to build more resilient communities, as 97% of those we surveyed agreed that enhancing building standards will help better protect their properties,” added Berven.
Learn More about building codes in your community, Nationwide’s efforts to update local and state building codes, and how the industry can take action together to build a more resilient future.