When a Wildfire Threatens Your Business
When a wildfire threatens your business, it can cost you plenty of money and also put a strain on your mental wellbeing. Wildfires cost taxpayers millions in damages every year. They also cause the destruction of public and private property and even the loss of lives. But most people don’t realize the toll wildfires extract on businesses.
Apart from the results mentioned above, wildfires can affect people’s livelihoods, ruin professional reputations, and force companies to close. Even with hospitality insurance and other coverage, businesses may have long-term and sometimes permanent consequences.
What are Wildfires?
Wildfires can arise out of nowhere. However, sometimes, a “prescribed” or “controlled” burn can ignite a wildfire. It was the case with the recent Hermits Peak Fire, which resulted from a prescribed burn at Las Dispensas by the US Forest Service. Subsequent winds caused the flames to spread beyond containment lines. It ultimately affected large portions of the Pecos/Las Vegas Ranger District.
Wildfires usually occur in forests, grasslands, prairies, and other natural areas. Several factors can cause them. Likewise, these factors include accidental human mistakes, intentional burning, or lightning strikes.
It is usually difficult to predict when wildfires will occur or whether controlled burning will spread out of control. About 50% of recorded wildfires result from unknown causes.
How Wildfires Affect Businesses
Many business owners go through a range of emotions when confronted with a wildfire. Most feel a sense of helplessness, knowing that every passing minute means more and more of their source of livelihood going up in flames.
But wildfires cause so much more than just immediate and physical damage. They can also have far-reaching and lasting consequences long after the last embers have dissipated. And as many business owners that have experienced wildfires firsthand know, there are direct and indirect effects.
Direct Effects of Wildfires
Property Damage: Wildfires can result in the loss of sales, administrative offices, and manufacturing facilities. If the company’s property is a short distance away, some issues may arise.
Equipment loss. Equipment, machinery, and business tools are equally at risk. These must be protected or relocated immediately to avoid costly or irreparable damage.
Loss or devaluation of assets. Damage can extend beyond real estate and equipment. With businesses such as agriculture, ranching, and forestry, the loss of support can be devastating.
Loss of livelihoods. Wildfires can result in short and long-term loss of livelihood. If entire communities are affected, or large portions of the population would have to evacuate, companies could lose a substantial part of their workforce.
Business closure. Severe and long-lasting wildfires can cause businesses to close down. Even if the company manages to recover from the tragedy, it may lose customers. It may also bring irreparable damage to its reputation.
Indirect Effects of Wildfires
Labor market. Wildfires of wny size almost always result in some degree of disruption to the labor market. Employees living in or near affected areas often have to deal with the consequences of the wildfire for prolonged periods. It could result in lost work days, impaired performance, and even mass resignations.
Transport services. Transportation will almost certainly be affected by a wildfire. Traveling to the hardest-hit areas is often extremely difficult due to the closed roads and railways. Furthermore, businesses that rely on these roads to transport goods and allow employee access will have to wait until work crews clear them.
Utilities. Even if the wildfire spares power plants or sewage facilities, supporting infrastructures could be at risk. When these essential support systems are affected, they disrupt the entire chain. In more extreme scenarios, companies may be unable to operate and possibly even be unable to generate sufficient revenues to cover their expenses.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.