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When the Nuns fire tore through Sonoma County in 2017, staff at Audubon Canyon Ranch’s Bouverie Preserve only had moments to evacuate. The fire, which ultimately burned more than 56,000 acres, destroyed seven buildings on the 565-acre site from which the nonprofit conducts research and education. Although Bouverie Preserve was unprepared for the physical devastation of the firestorm, they were ready to rebuild and recover, in ways they didn’t even realize.
In the United States, extreme weather events continue to increase in frequency and intensity. Last year in total 8,835 burn were recorded only in California. These fires burned more than 2.5 million acres of land and destroyed or damaged more than 3,600 buildings.
This year, due to record low rainfall, wildfire season started even earlier than usual and is expected to last longer. Given these bleak forecasts, it is critical for small and large business owners to plan ahead to ensure their businesses are adequately covered in the event of wildfire-related or other damage.
Here are three essential steps entrepreneurs should take to prepare their businesses for the wildfire season of 2022:
Related: Five Ways to Prepare Your Business for Natural Disasters, Disasters and Loss of Income
1. Assemble your team
Though she didn’t know it at the time, Julia Clothier, COO of Audubon Canyon Ranch, had taken the first step in assembling a disaster recovery team when she hired a highly regarded insurance company to arrange coverage for the property. The ne plus ultra of preparedness is to have a committed relationship with a team of experts you can call if the worst happens. While Audubon Canyon Ranch wasn’t quite there, they did manage to call the right person after the firestorm destroyed the property.
The best time to consult a trusted team of insurance advisors (including your attorney, accountant, insurance broker, and a public expert) is before purchasing or renewing your business insurance policy. A team of diverse expertise can advise you on every corner of the purchase, highlighting coverages or scenarios based on their unique area of experience. Each commercial or industrial sector has its own insurance coverage needs, and consulting with professionals about your company’s unique needs can save time, money and stress. Bouverie Preserve built his team after the fire destroyed the property, but they were lucky that their agent already had his own team. With a few phone calls, he assembled a recovery team of lawyers, public adjusters and reconstruction specialists who turned the disaster around.
While most companies already have relationships with lawyers, accountants and insurance brokers, public claims adjusters are an underused – and relatively unknown – resource. They specialize in the negotiation and settlement of property insurance and disaster recovery claims on behalf of the policyholder. In the same way that your insurance company has its own claims adjuster, you can also hire a public claims adjuster to prepare and submit your insurance claim and negotiate on your behalf to ensure that you receive the full amount owed under your policy. gets back. Adding a public expert to your team prior to a disaster gives you an unbiased expert to analyze your policy and identify gaps in coverage before it’s too late.
Each expert added to your team will provide a unique perspective on what’s best for your business, strengthening your preparedness plan. With a pre-established support team, you can minimize your business disruption and quickly get your business back on track in the event of wildfire damage.
Related: 7 Types of Insurance You Need to Protect Your Business
2. Check your insurance
Bouverie Preserve is now able to continue rebuilding, in large part because Audubon Canyon Ranch had adequate insurance and because it had assembled a highly qualified recovery team – but here’s the simple story: fire, insurance claim, rebuild. This four-word summary doesn’t begin to cover the complexities of their actual recovery.
It may seem obvious that the key to avoiding a financial catastrophe in the event of a loss is knowing exactly what is and is not covered by your insurance policy. But when was the last time you sat down and read your policy? Insurance policies are labyrinthine and not easy to parse. The devil is in the details, and even a comma can change the meaning – and therefore the coverage – in your policy.
Please read your policy carefully or consult your agent to ensure your policy covers the cost of replacing or repairing property damaged by a wildfire. Is your equipment, machines and stock covered? What is excluded? Other critical points to review include named insured and named locations: if your product is processed or stored at a different location, please ensure these locations are stated on your policy.
If you haven’t updated your policy since you bought a new appliance or renovated your facility, your business may not be adequately protected. By keeping your insurance up to date, your property is insured in the event of an emergency. With labor and material costs higher than ever, it’s best to check your policy coverages at least twice a year.
In the aftermath of the nuns fire, it came as a surprise to Clothier and her management that, while their general coverage was adequate, they learned that a building and a carport were not covered, nor was the fiber optic cable providing corporate Internet access. to their rural location.
Another surprise came in the form of the additional cost to rebuild to code. This cover, known as coverage of laws and regulations in your policy, provides for the increased cost of converting your structure to the current codes. Older buildings will always require significantly higher coverages to comply with today’s building and safety codes, but even newer buildings must be carefully evaluated when purchasing or renewing insurance. Price increases in the asking price could further increase reconstruction costs and reduce the availability of labour. Bouverie Preserve struggled with the 36-month limit to complete their claim as they competed with everyone else who had lost property in the firestorm.
Related: I lost almost everything in a natural disaster. Here’s how I recovered.
3. Make a video of your property
Fortunately, while no one had completed a full inventory of the business premises at Bouverie Preserve, they had extensive documentation in the form of photographs, blueprints and a master plan for the facilities documenting the buildings. However, reconstructing a company’s entire content and inventory is tedious, difficult work in the best of circumstances.
You can save yourself hours of time, not to mention thousands of dollars (even millions, depending on the size and scope of your business) by completing a detailed inventory before an event takes place. The easiest way to achieve this is to record a video of every item at your business location and conduct a thorough inventory on a regular basis to assess the true value of your business. Updating your insurance coverage based on regularly performed inventories is the key to full financial recovery after a disaster.
After a wildfire, it can be difficult to assess what has been lost, and it is impossible for even the most diligent business owner to remember every item. By regularly shooting videos of your property — and storing those videos in the cloud — you can be sure that the entire content of your property is properly reimbursed after a disaster.
According to a study by Marshall & Swift/Boeckh, 75% of US companies are underinsured, and the Federal Emergency Management Agency (FEMA) reports that: 40% of businesses don’t reopen after disaster and another 25% fail in the following year. So, as wildfire season approaches every year, don’t get underinsured. The three simple steps above can make all the difference in achieving a successful business recovery.
Three years after the fire that destroyed seven of its buildings, Bouverie Preserve can now rebuild. They could have done this sooner had they contacted a licensed public expert right away. Armed with hard-won knowledge, they now have their recovery team, regularly updated insurance coverage, and a detailed business inventory. May the recent history of this vital educational nonprofit be a lesson to all of us, as entrepreneurs, in implementing practices that will protect our businesses this wildfire season and beyond.