“What happens to my business if a storm hits my shop?” For a one- to ten-person contractor the honest answer is that the shop, the trucks, one laptop and the owner’s phone are the business. Lose them together and you lose the schedule, the customer list, the books and the tools in one night. Most of what follows costs little: an afternoon and a call to your insurance agent. That afternoon decides whether the week after a disaster is spent rebuilding records or going back to work.
Start with what you could not rebuild
Among the hazards a business faces, Ready.gov, the federal preparedness site, lists natural ones like floods, hurricanes, tornadoes and earthquakes, and technology-related ones like power outages and equipment failure. A dead hard drive and a flooded office cost you the same records. Its guidance on data says loss can come from “hardware failure, human error, hacking and malware,” and that a backup plan means deciding what to back up, scheduling the backups, and “periodically validating that data has been accurately backed up.” It also suggests scanning paper vital records so they are backed up with everything else.
For a contractor, the list is short:
Keep one copy somewhere a storm at the shop cannot reach: an online backup service, or a drive kept at home if home is not next to the shop. Then restore one file from it, once, to prove it works. A backup nobody has opened is a hope, not a backup.
An insurance check-up before the season
The gap that surprises most owners is flood. The Insurance Information Institute says damage from flooding, including hurricane storm surge, “typically is not covered under a standard commercial policy,” whether a Commercial Package Policy or a Business Owners Policy. The National Flood Insurance Program sells commercial flood policies covering a building up to $500,000 and its contents up to $500,000, and a new policy generally takes effect 30 days after purchase, with a few exceptions such as a policy bought while taking out or renewing a mortgage. Buying it when the storm is on the forecast is too late.
Know what flood insurance leaves out, too. FloodSmart lists cars and most self-propelled vehicles, property outside the building, and “financial losses caused by business interruption” among the things it does not cover. The Triple-I article adds that flood damage to business vehicles can be included in the optional comprehensive part of your business auto policy.
Take these questions to your agent:
- Am I covered for flood at the shop, and for what limit? If not, what would an NFIP or private flood policy cost?
- Do my trucks carry comprehensive coverage, and does it include flood?
- Are my tools and equipment covered when they are in the shop, in the truck and on a job?
- Do I have business income coverage, what event triggers it, and how long after the loss does it start paying?
- What do you need from me to file a claim fast, and what should I photograph now?
Contractor Insurance: Liability, Commercial Auto, Tools and Umbrella explains each of those policies in more depth.
Who you will need to reach, and how
Ready.gov’s advice on crisis communication fits a small shop as well as a large one: compile contact information for each audience in advance, keep it “accessible during an incident,” update it regularly, and write message templates ahead of time, stored where you can reach them remotely. For a contractor the audiences are the crew, the customers with jobs in progress or on the calendar, your main suppliers and your insurer.
Two templates cover most of it. To the crew: whether the shop is open, where to report and when you will update them next. To customers: “We are safe. Your job is on hold until [date or next update]; we will contact you by [day] with a new start date.” Send it by the channel each customer already uses with you.
If a disaster is declared: the SBA and the IRS
SBA disaster loans. In a declared disaster area, the Small Business Administration lends to businesses of any size for losses not fully covered by insurance. Its business physical disaster loans go up to $2 million to repair or replace real property, machinery, equipment, fixtures, inventory and leasehold improvements; insurance proceeds may be deducted from the eligible amount. Economic Injury Disaster Loans give small businesses working capital for bills they cannot pay because of the disaster, but only when the SBA finds they cannot get credit elsewhere, and the SBA says “loss of expected profits or a decline in sales is not considered substantial economic injury.” The combined maximum is $2 million. The terms on the SBA’s page: the first payment deferred and no interest for 12 months, a fixed rate of no more than 4% for applicants who cannot get credit elsewhere (no more than 8% on a physical damage loan for those who can), up to 30 years to repay, and collateral required on loans over $50,000 in Presidential declarations. These are loans, repaid with interest.
IRS deadline relief. A FEMA declaration lets the IRS postpone filing and payment deadlines for taxpayers in the covered area, and its relief notices say it “automatically identifies taxpayers located in the covered disaster area.” Read each notice for payroll, though. In its October 14, 2026 relief for Hurricane Isaias in Florida, the IRS gave affected taxpayers until February 8, 2027 for most returns and payments, but it did not postpone payroll tax deposits; it only abated penalties on deposits due on or after October 9 and before October 26, 2026, as long as they were made by October 26. Keep payroll deposits on schedule unless the notice for your disaster says otherwise.
Rebuilding lost records. The IRS page on reconstructing records says to get free transcripts of past returns with its Get Transcript tool or Form 4506-T, to write the disaster designation across the top of Form 4506-T or 4506 to speed processing and waive the usual fee, and, for lost inventory, to get copies of supplier invoices going back at least one calendar year.
The first week
- Account for every crew member before anything else.
- Photograph and video the damage before cleanup starts; the IRS says to do it as soon after the disaster as possible, because it helps establish the extent of the damage.
- Report the claim to your insurer and keep every receipt for emergency repairs and rentals.
- Restore the books and the customer list from your backup onto whatever computer you have, and check that the bank, payroll and tax accounts work.
- Send the customer template to every open job, with an honest new date.
- Check whether your county is in a declared disaster area, for the SBA and the IRS.
- Before taking storm work, read the price-gouging laws and plan how you will sort the calls; After the Storm: Triage When the Leads Flood In covers that.
Put the list, the agent’s answers and the two templates on one page and keep it with the backup. That page is the plan.
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.