Twenty years ago this summer, Hurricane Katrina forced businesses, property owners, insurers, and courts to grapple with unprecedented questions about coverage, liability, recovery, and preparedness. For those who lived through the loss and rebuilding of homes and businesses, it redefined “community.” 

Nearly two decades later, the lessons learned from Katrina have reshaped how insurers draft policies, how courts interpret them, and how businesses and lawmakers approach disaster planning and readiness. The legal framework that emerged continues to influence claims handling, litigation strategies, and risk management across the country. 

The storm also taught organizations how to plan for the unthinkable, and what it means to protect the people who make businesses operate, no matter the obstacle. In addition to natural disasters and pandemics, myriad events could impact your workforce and business operations: transportation strikes, cellphone network outages, political gatherings, or an unexpected illness/ death are all scenarios that modern businesses can – and should – develop plans to address. 

How disasters like Katrina reshaped the insurance and legal landscape

Insurance impact

Before Hurricane Katrina, the record insured loss event for the state of Louisiana was a hailstorm in New Orleans that cost half a billion dollars for insurers in paid losses. Katrina’s category three wind strength alone cost Louisiana insurers $23.3 billion in insured claims – 50 times the previous record. (This was one year after Florida, in 2004, had four major hurricanes make landfall in one season.) The world changed following Hurricane Katrina, and the changes in the insurance industry were among the most drastic. 

Following the 2004 and 2005 storm seasons, the insurance industry began developing pervasive Catastrophe Models (Cat Models). Developed by mathematicians, actuaries, construction experts, engineers, meteorologists, and other experts, these models assess insurers’ and reinsurers’ books of business for risk. The goal is to predict the size, strength, path, and location of storms, as well as the litigation atmosphere in a given footprint, that would impact a company’s portfolio.

In the aftermath of hurricanes and other natural disasters, insurers often experience a shortage of qualified adjusters to address the large-scale damage in a given area. This often prompts regulators to issue extensions on claims adjustment deadlines. This model to bring contract adjusters on board for short periods has been expanded and refined since Katrina.

Legal impact

Unexpected events can shut down business operations and civil services for days, weeks, and even months. Law firms and legal teams in particular need to be prepared for prolonged court closures and deferment of matters to manage everything from client needs to personnel expectations and cash flow during such disturbances.

If a disaster is extreme enough, insureds can anticipate a loss of revenue. There are certain coverages, including business interruption coverage, that may be effective in staving off the impacts of those losses.

What law firms and their clients should be doing today to prepare for inevitable disruptions

Broker visits: 

Savvy businesses can prepare for disasters by meeting annually with their insurance broker/ agent. Coverages change all the time in major ways that can leave a firm or business lacking if policies are “set and forget” on the shelf for years.

During these annual visits, business leaders can not only review and assess existing coverage, but can also discuss specific scenarios with the provider to understand what is covered and, critically, what is excluded? Extreme weather, widespread health concerns, and various other “unforeseen” scenarios may present minimal risk, but these risks have increased in the 20 intervening years since Katrina. How much risk is your business positioned to tolerate?

Advance/ ongoing planning:

In the event of a disaster of any kind, the underlying concerns for every business remain the same: first and foremost, are our people ok? Do we have reliable communication strategies in place so that we can confirm that they are safe and have their basic needs met? Once personnel are accounted for and in a position to resume work, businesses can focus on the short-term infrastructure required to operate to a minimally acceptable degree.

Before emergencies arise, businesses can establish programs and protocols to minimize confusion and interruptions. In addition to resilience planning (discussed below), businesses may wish to implement the following:

• Monitoring events across your footprint: From weather events to political unrest to pandemics, there are myriad events that may restrict your employees’ ability to perform their duties. Standing up a cross-functional administrative team that meets regularly with relevant office leadership in advance of major anticipated events positions businesses to respond to interruptions with speed and clarity. 
   
• Cross-training employees across offices and departments: If a certain business function is primarily performed in a given office and that office goes out of commission, cross-trained professionals in other geographic areas of related teams to “fill the gap” in the interim are incredibly useful. (In law firms, this comes in handy in non-emergent situations as well, when urgent deadlines require “all hands on deck.”)
   
• Diversifying your tech stack: Rather than centralizing your data on one static data center, having duplicated and distributed servers in various areas of your footprint can minimize the interruption to network connectivity in the event of a hack, data breach, or weather event.
   
• Establishing systems to support your workforce, including:
   
  • Employee communication systems: Real-time, two-way communication mechanisms between a business and employees during a disaster (with the option to “respond one if you’re ok, respond 2 for someone to contact you”) are critical to establish in advance to assess needs, make a plan, and deploy resources during emergencies.
     
  • Employee assistance program (EAP): A framework available to grant all employees access to mental health and counseling resources can be put in place before a disaster occurs. 
     
  • Employee emergency fund: Managed by a local community foundation or other third-party, these funds offer employees the opportunity to support their colleagues in times of distress and offer funding to those impacted by unforeseen hardships.
     

Why resilience planning is no longer optional in the modern legal market

Resilience Planning

Resilience planning in 2025 looks very different from what it did pre-Katrina, but twenty-first-century businesses must develop Business Continuity and Disaster Recovery plans to eliminate downtime and remain adaptive. From operations to staffing and personnel issues to communications and branding, broad plans that consider every element of a disturbance can be put into place with blanks to fill in based on specific circumstances. Geography, industry, personnel, equipment, and infrastructure, company culture – all these areas factor into mapping a particular plan.

From weather and health disasters to unexpected incapacitation of key personnel, business leaders must think through various potential disturbances and build draft parameters surrounding each one, so that policies don’t have to be conceived while the disaster is happening. 

That said, a plan is only as good as its execution, and plans that sit static on a shelf for years are not terribly helpful. Dwelling on worst-case scenarios is no one’s idea of fun, but effective resilience planning requires working through the plan regularly through tabletop exercises and scenario planning. Planning in advance can alleviate pressure and enable companies to remain agile in what is undoubtedly a stressful time.