Thedroughtconditionsin Califor- nia have significantly increased the risk of wildfires across the state, and for vineyards in the
path of these fires, the stakes are even
higher. In August and September of this
year, several fires threatened the livelihood of this $114 billion a year industry.
A fire near Vandenburg Air Force Base
in Lompac, Calif., covered more than
12,000 acres, the largest fire in the base’s
history. Meanwhile, the Soberanes Fire,
which burned for nearly three months
along California’s scenic Central Coast,
could became the most expensive fire in
terms of firefighting with costs exceeding
$235 million according to an article in the
San Francisco Chronicle.
The Soberanes Fire and 2015 wildfires
threatened the American wine-produc-
ing regions in Northern California, which
generates more than $57.6 billion in eco-
nomic activity according to the Wine
Institute. At the beginning of the harvest
season, vineyards burned and grapes lan-
guished on the vines due to evacuation
orders. A major concern for winemakers
was the threat that their wine could be
tainted by smoke.
Because of the size, diversity and value
of wineries and vineyards, these businesses face complex risk management
and claims settling challenges. Wildfire
claims for wineries, though infrequent,
are catastrophic. That’s why mitigating
the risks of wildfire claims and reducing
claims severity begins with the local insurance agent or broker and persists long
after the fire has been contained.
How can the winery’s insurance and
claims team effectively manage the life-
cycle of winery wildfire claims? Here are
five practices and competencies neces-
sary for the best possible outcome.
1. Understand the realities
After every new fire we hear, “We’ve
never seen anything like it,” or “I’ve never
seen fire behavior like this before.” California wildfires seem to be growing in intensity and size. Reacting to fire behavior
is difficult enough since it inflicts damage
similar to tornadoes. One building may
be totaled, and the building next door
may be untouched.
These fires move at incredible speeds
and risk mitigation tactics cannot always
help if a property lies directly in one’s
path. Firefighters and officials are focused first on saving lives, not property.
Large property losses are the reality with
wildfire claims, and claims professionals
Up in Flames:
Wineries & Wildfire Claims
By Larry Chasin
A column of smoke rises
from the Wragg fire near
Winters, Calif., on Thursday,
July 23, 2015. According to
Cal Fire, the blaze scorched
more than 6,000 acres and is
threatening 200 structures.
(AP Photo/Noah Berger)