Three Data-Driven Solutions to Help Restaurants Better Weather Climate Storms

There’s no question. The hospitality business is under the weather. Literally. 

Weather related risk is worsening. In 2025’s first half, 14 separate billion dollar weather disasters – ranging from hurricanes to floods to wildfires and extreme heat – racked up $101.4 billion in damages. Location-driven businesses like hotels, resorts and restaurants are among the most vulnerable. 

Independent restaurants are particularly at risk. They account for almost 70 percent of the restaurant sector; 60 percent in regions most prone to disasters have been hit with direct financial losses in the last 12 months alone.  

The damage is compounded as guest traffic post-disaster drops off. For example, the January Palisades Fire in southern California caused $61 billion in damages. Restaurants that survived saw business drop 50 percent or more, and the fire’s broader economic impacts are behind a steady stream of permanent closures 10 months later.

Traditional insurance coverage by itself can fall short as a protection, as it can be harder to access, less comprehensive, and more expensive. 

Take a high-risk coastal region like Florida. A limited number of carriers makes separate policies covering wind and flood damage  prohibitively expensive and difficult to secure. Even then, coverage is usually excluded for ongoing expenses like rent and loan payments. And business interruption coverage can be limited if it’s even available. Other insurance trends like rising deductibles and restrictions on coverage add to the uncertainty.

Restaurant management is well advised to explore options outside of traditional insurance. Several solutions are increasingly important to integrate into their risk management strategy to better weather the storm: CAT modeling, Risk Management Information Systems (RMIS), and alternative coverages like parametric insurance. Working together, they’re the basis for a holistic resilience strategy.

Here’s a look at the three tools.

1. Catastrophe modeling – a program guide. Historical data and predictive analytics drive catastrophe modeling – a crucial way to understand the potential risks and the financial impacts of natural or man-made catastrophic future events. It raises important considerations for property owners:

• The extent of outdated or incomplete information (think outdated valuations) which can distort risk assessments and limit coverage effectiveness. Accurate data is key to better modeling outcomes and policy design.

• New exposures created by business growth, important for informing insurance planning.

• Unintentional coverage gaps resulting from changing insurance policies and terms make it critical to continuously align insurance programs with evolving risk profiles.

2. RMIS for organizing and managing data. Claims management and business oversight are far more effective with RMIS’ functionality – organizing claims tracking and incident logging and centralizing property data. Risks are evaluated quickly, and reports based on the data are generated on demand. With data centralized, risk awareness is heightened and opportunities for cost-savings revealed. And importantly, risk trends can be more easily identified, analyzed and addressed.

3. Parametric insurance – improved protection against severe weather impacts. It offers a pre-specified payout based on the magnitude of a local weather event – and the holder’s restaurant site is not required to have been directly hit. Policies are paid for specific perils like wind speed or flood depth. They are paid once the benchmark is met. Coverage terms are completely customizable. Payouts are faster and undisputed, versus the process for traditional coverage, often  cumbersome and delayed in response to weather events.  

Parametric insurance is a good way for restaurateurs to protect business income when travelers are deterred by severe weather. But it also can extend to disruptions in third-party infrastructures like airport closures. Also worth noting: parametric coverage can support deductible buy-downs, a way to maintain financial stability during recovery periods. 

Complexity, cost and the potential of disruptions of adoption to the business may keep some restaurant groups from pursuing such data-driven tools and technology. But waiting for a crisis to move may well limit recovery options and raise costs.