Everything You Need To Know About Business Loss Wildfire Claims

Wildfires do not damage your property. They also affect the livelihood of people and everything that comes in contact with them.

However, the real fight starts once the flames die down. Therefore, you should have a clear understanding of the necessary steps to take after a wildfire incident.

That’s where professional guidance becomes critical. The Bernheim Law Firm specialises in helping businesses recover what is rightfully theirs, cutting through the complexities of insurance policies. Don’t let red tape and lowball offers extinguish your chances of a fair settlement.

Understanding your rights is the first step toward rebuilding your life and business. From documenting damages to disputing undervalued claims, this guide will arm you with the knowledge you need before making any Business Loss Wildfire Claims.

Common Business Losses After A Wildfire

When a wildfire strikes, the damage is rarely limited to what you can see. For business owners, the aftermath often includes both tangible and intangible losses that can cripple operations for weeks, months, or even permanently.

Let’s break down the key types of losses most businesses experience—and why they matter when filing for business loss wildfire claims.

1. Property Damage

Physical damage is the most noticeable loss that occurs after a wildfire incident. However, physical damage is a broad term that encompasses various forms of damage.

These generally include premises damage, machinery damage (if you have a manufacturing plant), loss of usable property, and other similar losses.

Even if the fire does not affect the property in any way, fire and smoke could leave your machinery unstable or unusable. Therefore, as an entrepreneur, you need to have a clear idea about the damages that have happened directly or indirectly due to wildfires.

Thankfully, commercial property insurance typically covers any such damages. However, insurers do undervalue the damage and reduce the claim amount. As a result, we suggest that you seek the help of a third party to assess the damage and then accept any terms presented by the insurers.

2. Business Interruption

Wildfires can prove catastrophic for your business operations. It can significantly increase a company’s overall losses. As a result, consider purchasing insurance that includes business interruption coverage. This coverage can help you to keep the ball rolling by covering lost income and ongoing payments.

Then again, you need to provide strict documentation that proves you are missing out on your financial liabilities due to business interruption.

One small disclaimer: Many insurance companies have a 72-hour waiting period. Therefore, read the fine print carefully to understand the clause effectively.

Under California Insurance Code Section 2051.5, insurers are required to pay the actual loss of business income sustained, subject to policy limits, when a covered peril causes the interruption. This law has been instrumental in resolving disputes between business owners and insurers following wildfires.

3. Supply Chain Disruptions

In some cases, your manufacturing facilities might remain untouched. However, you can still face losses if your supply chain faces any sort of damage. Supply chain disruption is a serious issue, as it can lead to significant revenue loss.

For example, your supply chain may have taken a hit. This will result in delayed order delivery, cancelled shipments and unavailable inventory. All of this could ruin your relationship with the client.

For this, you need to inquire whether your plan includes contingent business interruption (CBI) coverage. CBI coverage helps businesses obtain compensation if they suffer business losses due to any type of calamity, such as a wildfire.

Unfortunately, CBI is not a standard practice followed by a company. Many companies do not offer it at all. Therefore, consider doing a detailed research.

4. Employee Downtime And Retention Costs

During periods of forced closure, you may still be responsible for paying employee wages, benefits, and healthcare. Keeping staff on payroll while generating no income is a painful but common scenario.

Some policies offer limited payroll protection, but the terms vary. In the absence of sufficient coverage, many business owners turn to federal or state relief programs for assistance, though these often involve lengthy applications and uncertain timelines.

5. Loss of Clients And Contracts

Wildfire damage doesn’t just disrupt your business; it can also jeopardise client relationships and long-term contracts. In industries where timelines and delivery are critical—like construction, logistics, or event planning—missed deadlines can lead to cancelled deals, lost trust, and damaged reputations.

Unfortunately, these types of losses are rarely covered unless explicitly stated in your policy. Still, they’re worth documenting thoroughly, especially if legal action becomes necessary.

What To Do Immediately After A Wildfire

Knowing what to do after a wildfire is quite important for a business. Un,ike a private property, a company is not a singular entity. It is a complex machine with several cogs. Therefore, in this section, we will examine all the steps that one needs to take after a wildfire.

1. Prioritise Safety First

Before entering your property, wait for clearance from fire officials. Hidden structural damage, gas leaks, or lingering embers can make the site dangerous. If your business is located in California, consult with your local County Fire Authority or Cal Fire for official re-entry guidance.

Don’t rush back in. Your safety—and the safety of your employees—comes first.

2. Document Everything

Once it’s safe, start documenting the damage as soon as possible. Use your phone to take wide and close-up photos and videos of:

• The exterior and interior of the building
• Damaged or destroyed equipment and inventory
• Burn marks, smoke damage, and debris
• Utilities, broken windows, collapsed roofing, etc.

Visual evidence is one of your strongest tools when negotiating a claim. Include timestamps on all images.

3. Secure The Premises

Insurers expect you to take “reasonable steps” to prevent further damage after the incident. This legal duty is called loss mitigation. According to most standard commercial policies, failing to do so can result in reduced compensation.

This might involve:

• Boarding up windows
• Installing temporary fencing
• Covering exposed areas with tarps
• Turning off utilities

Keep receipts of any emergency repairs or mitigation services you pay for—these are often reimbursable under your policy.

4. Notify Your Insurance Provider

Contact your insurance company as soon as you can. Most policies require prompt notice of loss, and delays could affect your claim. Be ready to provide:

• Your policy number
• Date and time of loss
• Description of damages
• Contact information for follow-up

While it’s okay to notify them immediately, refrain from giving a recorded statement or signing anything right away. Initial estimates or offers are often far below what your claim is worth. If possible, speak to a Business Loss Wildfire Claims attorney before agreeing to anything.

5. Review Your Policy

Review your commercial insurance policy carefully. Pay close attention to:

• Coverage limits
• Business interruption provisions
• Exclusions
• Claim filing deadlines
• Waiting periods

If you don’t understand the language, seek legal help. Remember, insurance policies are legal contracts—filled with fine print that could either protect you or work against you.

6. Track Your Losses

Start a detailed log of all wildfire-related expenses and losses. This includes:

• Lost income or sales
• Cancelled client contracts
• Temporary relocation costs
• Employee payroll
• Equipment replacement

Attach invoices, bank statements, and any supporting documents. The more organised you are, the harder it will be for the insurer to dispute your numbers.

7. Consider Legal Help

If the damage is significant or your policy has complicated terms, consider consulting a lawyer who specialises in wildfire or business interruption claims. Insurance companies have entire legal departments reviewing claims, so you should have experienced advocacy on your side, too.

Do Not Let The Wildfire Put You Out Of Business

Business loss wildfire claims are battles of attrition—insurance companies bank on business owners giving up. But with the right evidence, legal knowledge, and persistence, you can secure the recovery you deserve.

If your claim has been denied or underpaid, time is critical. The sooner you act, the stronger your position becomes. Don’t let an insurer’s delays turn a disaster into a financial catastrophe.

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