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As the 2017 Nuns Fire raged through Sonoma County, employees at Audubon Canyon Ranch’s Bouverie Preserve had only moments to evacuate. The fire, which ultimately burned more than 56,000 acres, destroyed seven buildings on the 565-acre property 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 weren’t even aware of.
Extreme weather events continue to increase in frequency and intensity in the United States. Last year, a total of 8,835 fires were recorded in California alone. 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, the wildfire season started even earlier than usual and is expected to last longer. With such bleak prospects, it’s important for owners of small and large businesses alike to plan ahead to ensure their businesses are adequately protected in the event of wildfires or other types of damage.
Here are three key steps entrepreneurs should take to prepare their business for the 2022 wildfire season:
Also see: Five Ways to Prepare Your Business for Natural Disasters, Disasters, and Lost Income
1. Assemble your team
Although she didn’t know it at the time, Audubon Canyon Ranch COO Julia Clothier had taken the first step in assembling a disaster recovery team when she hired a highly regarded insurance company to cover the property. That no plus ultra of preparedness is having an established relationship with a team of experts who you can call if the worst happens. Although Audubon Canyon Ranch wasn’t quite there, they knew the right person to call after the firestorm destroyed the property.
The best time to consult with a trusted team of insurance advisors (including your solicitor, accountant, insurance broker and a public surveyor) is before purchasing or renewing your business insurance. A team with different expertise can advise you on all aspects of the purchase and highlight covers or scenarios based on their unique area of experience. Every commercial or industrial sector has its own insurance coverage requirements, and consulting with professionals about your company’s unique needs can save time, money and stress. Bouverie Preserve assembled his team after the fire destroyed the property, but they were fortunate that their agent already had his own team. With a few phone calls, he put together a rescue team of lawyers, surveyors, and reconstruction specialists who turned the disaster around.
While most companies already have relationships with lawyers, accountants and insurance brokers, public sector experts are an underutilized – and relatively unknown – resource. They specialize in negotiating and settling property insurance claims and disaster recovery on behalf of the policyholder. Just as your insurance company has its own adjuster, you can also hire a public adjuster to prepare and submit your insurance claim and negotiate on your behalf to ensure you recover the full amount owed under your policy. When you add a public expert to your pre-disaster team, you have an unbiased expert analyzing your policy and identifying coverage gaps before it’s too late.
Each expert added to your team brings a unique perspective on what’s best for your organization and strengthens your preparedness plan. A pre-established support team will help you minimize your business disruption and quickly get your business back on track in the event of wildfire damage.
Also see: 7 types of insurance you need to protect your business
2. Check your insurance
Bouverie Preserve is now able to continue rebuilding, largely because Audubon Canyon Ranch secured proper insurance and assembled a highly skilled salvage team — but this is the simple story: fire, insurance claim, rebuild. This four-word summary doesn’t even come close to covering the complexities of her actual recovery.
It may seem obvious that the key to avoiding financial disaster when you make a claim is to understand exactly what is (and isn’t) 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 analyze. The devil is in the details, and even a comma can change the meaning – and therefore the coverage – of your policy.
Read your policy carefully or check with your agent to make sure your policy will cover the cost of replacing or repairing property damaged by a wildfire. Are your devices, machines and inventory covered? What is excluded? Other critical points to check are named insureds and named locations: if your product will be processed or stored off-site, make sure these locations are listed on your policy.
If you haven’t updated your policy since you bought a new device or renovated your facility, your business may not be adequately protected. Keep your insurance up to date to ensure your property is covered in the event of a disaster. With labor and material costs at an all-time high, it’s a good idea to review your insurance policies at least twice a year.
After the nuns’ fire, Clothier and her board of directors were surprised to learn – even though their nationwide coverage was adequate – that a building and carport were not covered by the policy, nor was the fiber optic cable that provided enterprise-level internet access for their rural location .
Another surprise was the additional cost of code recovery. This coverage, referred to in your policy as Laws and Regulations coverage, covers the higher cost of converting your structure to the current codes. Older buildings will always require significantly higher coverages to meet modern building and safety codes, but newer buildings should also be carefully considered when purchasing or renewing insurance. Price increases from increases in demand can further increase the cost of reconstruction and reduce labor availability. Bouverie Preserve struggled with the 36-month limit to meet their claim when they found themselves in competition with everyone else who had lost property during the firestorm.
See also: 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 commercial property at Bouverie Preserve, they had extensive documentation in the form of photographs, blueprints, and a facility master plan documenting the buildings. However, reconstructing a company’s entire contents and inventory is tedious, difficult work under the best of circumstances.
You can save hours of time, not to mention thousands of dollars (even millions, depending on the size and scope of your business) by conducting a detailed inventory before an event occurs. The easiest way to do this is to record a video of each item at your store location and regularly conduct a thorough inventory to determine the true value of your business. Updating your insurance coverage based on regularly conducted inventories is key to full financial recovery after a disaster.
After a wildfire, it can be difficult to assess what has been lost and impossible for even the most diligent business owner to remember every item. By regularly recording video of your property – and storing that video in the cloud – you can be assured that all content on your property will be properly compensated after a disaster.
According to a Marshall & Swift/Boeckh survey, 75% of US businesses are underinsured, and the Federal Emergency Management Agency (FEMA) reports that 40% of businesses fail to reopen after a disaster and another 25% fail within the following year. So don’t get caught underinsured as wildfire season approaches each year. The three simple steps above can make all the difference in achieving successful business recovery.
Three years after the fire that destroyed seven of its buildings, Bouverie Preserve is now ready to rebuild. They could have done this sooner if they had contacted an accredited public expert immediately. Armed with hard-won knowledge, they now have a recovery team, regularly updated insurance coverage, and a detailed business inventory. May the recent history of this important nonprofit educational organization teach us all as entrepreneurs as we implement practices that protect our businesses this wildfire season and beyond.