Two red squares and two white squares in a checked pattern make up Uniform, which stands for "U" in the signal flag alphabet. This pattern would make a really garish uniform though, so thankfully it's just a flag. For an extremely trivial bit of trivia, "Uniform" is tied for the second longest name in the NATO phonetic alphabet, beaten only by "November".
This is used to signal other ships that they are running into danger. That seems like the type of super vague message I used to hate getting in college - "Please come by the Dean's office at your earliest convenience". If I saw this being flown at me I'd immediately throw up a Kilo in response (Let's talk).
Check out the rest of our Signal Flag explanations!