A presidential executive order aimed at making federal buildings more resilient to earthquakes could have a positive impact on the private sector as well.

Insurance industry observers say the order sets a good example and could serve as the impetus for positive change. At a minimum, they say, it underscores the reality of the earthquake risk and may lead to enhanced standards to protect against other natural hazards such as wildfires.

The Feb. 2 order — “Establishing a Federal Earthquake Risk Management Standard” — noted that the federal government “recognizes that building codes and standards primarily focus on ensuring minimum acceptable levels of earthquake safety for preserving the lives of building occupants.”

But in order to achieve “true resilience” to earthquakes, those codes and standards may need to be exceeded to ensure that new and existing buildings “can continue to perform their essential functions following future earthquakes.”

The order encourages federal agencies “to consider going beyond the codes and standards set out in this order to ensure that buildings are fully earthquake resilient.”

“We are pleased the administration is focused on resilience and the need to build forward, rather than continuing to rebuild and repair buildings in the same vulnerable locations ignoring the risk of known natural hazards and hoping for the best,” said Julie Rochman, president and CEO of the Insurance Institute for Business and Home Safety in Tampa, Florida, in an email. The industry-backed group promotes effective, well-enforced building codes.

In addition to affecting new buildings or alterations to existing buildings, the order specifies that federal agencies lease only buildings that “that have been designed and constructed in accord with the appropriate earthquake-resistant design and construction standards that apply to the type of lease at issue.”

The order goes on to say the building codes must comply with earthquake-resistant design provision of the International Building Code or other specified codes.

The order came the same day the White House held a half-day earthquake resilience summit that stressed a “whole community approach” as a means to improve resilience to earthquakes and other natural exposures by involving scientists, engineers, public officials and private entities.

Other insurance industry observers welcomed the White House actions.

“I applaud the Obama administration for doing this. It's long overdue,” said Howard Mills, global insurance regulatory leader at consulting firm Deloitte L.L.P. in New York.

“Just look at the takeup rate of earthquake insurance in California — it hovers between 13% and 14%. It's incredibly low,” he said. “The more insurance that is taken up, the less of a burden on the public sector it will be when the need to rebuild arises.”

“The executive order requiring that federal buildings be built stronger to better withstand earthquakes is a small but welcome step,” Jimi Grande, vice president in the Washington office of the National Association of Mutual Insurance Companies, said in an email. “More significant is that we continue to see acknowledgement that mitigation provides a far better solution for natural disasters than the current 'wait, hope, rebuild' federal policy.”

Ms. Rochman of the IBHS noted that the “new earthquake risk management standard is consistent with what the administration did last year by implementing a new flood hazard mitigation standard,” she said in her email. “We hope the administration continues on this positive path by developing similar standards for wind-related hazards and wildfire.”

An insurance trade group official stressed the private sector's role in catastrophe planning.

“PCI supports efforts to prepare by the private sector,” Don Griffin, a vice president at the Chicago-based Property Casualty Insurers Association of America, said in an email. “The insurance industry supports strong building codes because we see firsthand the personal and financial impact that inadequate standards and code enforcement can have on a family, community or state.”