The Financial Effects of a Natural Disaster

One of the biggest problems for areas affected by natural disasters is business disruption. With road, communication infrastructure and building damage, it's not uncommon for local businesses to be shut down for some time after the disaster occurs. Some smaller businesses may not ever be able to recover and will close their doors. After the devastation of Hurricane Harvey in 2017, many restaurants never reopened because they couldn't afford the cost to renovate or lost so much business from being closed that they couldn't make themselves profitable again.

Large businesses are also affected, and the costs are often passed on to consumers. U.S. oil refineries were hit hard by Harvey. Not only was it impossible for them to continue production during the storm, the damage after it was over made it all but impossible for employees to get to work and damage to the refineries themselves also affected production. This reduction in available oil was felt not just in the U.S., but also by Mexico, which gets of its gasoline from Texas.

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