Hill was on the ground helping small businesses in the aftermath of the bushfires that swept through Victoria in early 2026. He says one of the worst aftershocks for affected businesses was just how much it costs to rebuild.“I was shocked to see the quotes come in and how widespread the underinsurance problem is. We are noticing it more and more, and so we’re working with brokers to ensure they have those conversations with their clients. Knowledge is power,” says Hill.Underinsurance could transform a temporary physical crisis into commercial ruin.“Addressing this comes back to being very clear about what it costs to reinstate the building that’s insured so the business can start operating again quickly. It’s important to consider the rebuilding cost, the cost to remove debris and the cost of building approvals,” Hill advises.A striking data point from the report is a lack of formal business continuity planning by smaller firms.As floodwaters from the Mary River inundate Queensland’s Maryborough CBD, underinsurance threatens to transform a temporary physical crisis into lasting commercial ruin. “Most owners know what they would need to do to reinstate their business, but often it’s not written down. That may be OK when you’re operating normally. But when the worst happens and your access to data is interrupted and you’ve lost your contacts, a well-thought-through plan that is written down stands you in good stead,” says Hill.The plan should include steps to get the business back up and running in the first 24 to 72 hours and then during the first week after a major event.“For small businesses, climate risk is fundamentally an operational risk. The most serious threats come from more frequent, extreme weather events disrupting operations and key supply chains,” says Nicholas Guest, partner of accounting and advice firm HLB Mann Judd.“Without preparation, these impacts could be existential. Most small businesses simply don’t have the capacity to absorb significant revenue or cost shocks, and few have continuity plans or backup supplier arrangements in place. My advice is to map your key dependencies, diversify your supply chain and build a simple continuity plan. These are not expensive tasks, but they are essential.”Managing disasters is one of several serious issues small businesses are handling in 2026. IAG’s research shows more than half (53 per cent) of small- to medium-sized businesses say they are facing economic and cost pressures.“We’re continually talking to our broking partners about rising construction costs, which have jumped up alongside global tensions. Small businesses need to be in a position to reinstate their business with correct sums insured. We encourage them to talk to a broker about how to ensure their valuations are up-to-date and keeping pace with inflation,” adds Hill.Getting to grip with the risks the business’s location is exposed to is paramount for long-term commercial survival.“It is really important for small businesses to understand the potential climate exposures they’re facing and what they can do to minimise the impact extreme weather can have on them. They can’t often move their business, but they can understand and minimise risk. That comes back to business continuity planning. An individual business can’t change the climate, but they can be prepared for it,” Hill says.Ultimately, the future of the nation’s small business sector depends on turning positive outlooks into practical resilience. Through mapping dependencies, addressing the risk of underinsurance and formalising emergency strategies, business leaders are better equipped to safeguard their hard-earned growth against the elements.These findings are part of the inaugural IAG Resilient Futures Report, which introduces the IAG Risk Index – a new national benchmark tracking Australians’ confidence, outlook and exposure to disruption. It draws on insights from more than 2400 consumers and small businesses across metropolitan, regional and rural communities. The research provides a comprehensive view of how Australians are experiencing, interpreting and responding to risk in an increasingly uncertain environment. View a copy of the report at iag.com.au/resilientfutures