Wildfires are unfortunately a part of life in California. As a small business owner, it is imperative to prepare in case of a wildfire by purchasing the right types of insurance – and to understand your legal rights if you suffer fire-related business losses. If you need assistance at any time with wildfire litigation for small businesses, don’t hesitate to contact an attorney.
The Impact of Wildfires on Small Businesses
A wildfire can be detrimental to a small business in California. It can cause obvious losses, such as property damage and destruction, if the building is in the wildfire’s path. However, a wildfire can also result in secondary business losses, such as a significant disruption to the community and local customer base. Wildfires create ripple effects that extend far beyond damage from being in the fire zone, including smoke inhalation risks and smoke damage, road closures, power outages, and forced evacuations. These issues can cripple a small business, leading to a significant decrease in customer traffic or the business having to close its doors for good.
Wildfire Insurance Claims for Small Businesses
Multiple types of insurance are available for small business owners to protect against losses connected to a California wildfire. It’s important to check the language of your policy, as a standard plan may contain wildfire exclusions. Relevant policies include:
- Commercial property insurance: covers damage to the premises, equipment and furniture
- Business interruption insurance: covers lost revenue and rent/mortgage payments
- Commercial auto insurance: covers damage to company vehicles
- Extra expense coverage: covers the costs of keeping the business open after the fire
An insurance company could deny a small business’s wildfire claim for reasons such as a missed filing deadline or the failure to mitigate damages. If your claim gets denied, you may be able to file an appeal. A wildfire attorney can help you with this legal process.
Filing a Negligence Lawsuit as a Small Business
Some wildfire cases in California extend beyond the insurance system and into wildfire litigation: the filing of a lawsuit or class action against a party for causing or contributing to the wildfire. The most common example is a claim against a utility company. Utility companies, such as Pacific Gas & Electric (PG&E), have been behind some of the deadliest and most destructive wildfires in California’s history. If there is evidence that the fire that impacted your small business was caused by utility company negligence, you could participate in a lawsuit against the company. Examples of utility company negligence include the failure to properly maintain power lines, using old or outdated electrical equipment, and failing to de-energize power lines in high-risk conditions. Wildfire litigation against an at-fault party could result in greater financial compensation than a small business insurance claim alone.
What Types of Wildfire Compensation Can a Small Business Recover?
A successful insurance claim or wildfire lawsuit in California could pay for losses such as property damage repairs, business interruption, profit losses, destroyed inventory, the price to repair or replace damaged equipment, temporary relocation, marketing losses, employee wage payments, and clean-up costs. If a utility company or another party is found to be responsible for starting a wildfire in California, your small business could receive financial compensation even if you don’t have insurance. For small businesses impacted in or around the Eaton region, an Eaton wildfire lawyer can help assess all potential recovery avenues.