As businesses across the US face growing risks from climate change, power outages are emerging as a significant concern, draining $150 billion from the economy annually.
In response to these challenges, Adaptive Insurance has launched a parametric insurance platform designed to help businesses protect themselves from climate-related risks.
The company said that its flagship product, GridProtect, offers technology-driven financial relief from power grid disruptions.
According to the Electric Power Research Institute (EPRI), power outages affect 15 million US businesses each month, with financial losses ranging from $2,108 for a three-minute outage to more than $8,000 for a one-hour outage.
Research also indicates that every $1 spent on resiliency can save $13 in cleanup and economic recovery costs, which businesses could instead use for growth, employee support, and community engagement.
Traditional insurance policies often leave businesses vulnerable by not covering short-duration power outages. Adaptive Insurance’s noted that it aims to close that gap by using AI and climate data to provide parametric coverage, which offers immediate financial relief without the standard 24-hour waiting period found in conventional policies.
"We’ve seen it all across the US – climate change is accelerating faster than the insurance industry can adapt, and businesses are paying the price," said Mike Gulla (pictured above), CEO and co-founder of Adaptive Insurance.
He said that GridProtect is designed to address a critical need in the market by providing financial protection as soon as an outage occurs, reducing uncertainty and helping businesses recover quickly. Gulla emphasized that the product is not just insurance but a tool for resilience.
Power grid failures have become more common, with 80% of the 1,755 major power outages since 2000 caused by weather-related events. FEMA reports that businesses closed for five days due to such outages have a 90% chance of not reopening.
Adaptive Insurance is one of the first companies to emerge from Montauk Climate, an incubator focused on developing climate-related technologies.
“Climate and weather events cause $1 billion in damage every three weeks in the US,” said Philip Krim, founder and partner at Montauk Climate. He noted that Adaptive was created to address these growing challenges with a scalable and effective approach.
What are your thoughts on this story? Please feel free to share your comments below.
