As part of the Northern California business community and as an advisor to business, we support the Napa and the surrounding Bay Area in getting homes and businesses back on their feet following the August 24, 2014 Napa Valley earthquake.
The earthquake that rocked Napa Valley and nearby regions left an estimated $1 billion in damages, according to a county news release. The McClatchy News Service recently observed the quake “upended more than wine barrels and mobile homes. It also was an unsettling reminder of how few Californians – homeowners and businesses alike – carry earthquake insurance.”
Sure, insurance agents will discuss earthquake insurance policies with business owners, but Napa Valley region had not experienced a quake of such magnitude since 1989. Thus, this rare but catastrophic risk was one for which the cost-benefit analysis dictated to many Californians that they should forgo the expensive form of insurance. Statistically, the shocking drop in homeowner earthquake insurance policies purchased over the last decade was dwarfed by the 29% drop in the number of California businesses that purchased policies over the same period. Reports are that only 10% of California businesses and residents carrying property insurance also carry earthquake insurance.
Where the wine and agriculture industry suffered $48 million worth of damage, and with over 120 businesses affected, the questions running through so many confused and disrupted lives include: “What do I do now? Did I need earthquake insurance, specifically? Am I covered? How do I perfect a claim if I am covered and where can I go for help?”
What to Do and How Stoel Can Lend a Helping Hand
Generally most businesses may have an “all-risk” commercial property coverage. However, that coverage usually does not cover damage caused by earthquakes. Most earthquake coverage comes from a separately purchased insurance plan. Even if you are among the smaller percentage of businesses that carry earthquake coverage, Stoel Rives can assist in verifying your coverage and working with you throughout the claims process.
First, as with many insurance claims, time and documentary support (including photographs) are of the essence. If you have not done so already, begin documenting and categorizing your losses (e.g., structural, equipment-related, income-related) and noting their suspected cause (e.g., shaking, fire). Experts can assist in this process. Competitively priced contractors or other experts can help assess for damages that the untrained eye won’t necessarily spot but you may be financially responsible for without perfecting coverage.
Second, simultaneously identify and collect all insurance policies acquired in operating your business. Businesses may not have readily available all of the terms of insurance that can help them during a disaster. You can always contact your insurance broker to help ensure that you have all of the potentially applicable policies at your disposal.
If, like most businesses, you find yourself without “earthquake coverage” and with a myriad of questions, Stoel Rives is here is help start and carry out the process needed for full recovery.
But whatever you do, don’t give up the search for assistance if, like many others, you lack an earthquake insurance policy. For instance, inland marine insurance is an archaically named type of insurance contained in some commercial liability policies that may cover damage caused by forces of nature to certain moveable commercial property, communications equipment, or forms of cargo. By way of another example, a fire that is “caused by or follows and earthquake” may be covered under a fire insurance policy. See e.g., Cal. Ins. Code §§ 10088.5, 2081. Aside from other forms of insurance you may have that could help, local organizations and government are active in acquiring funds to get Napa back on its feet.
In short, you worked hard to develop your business. Leave no stone unturned in keeping it successful.
Our business attorneys regularly assist clients in evaluating the adequacy of their existing insurance coverage. Stoel Rives’ attorneys help businesses evaluate and recover the full measure of damages resulting from insurers’ refusal to honor insurance contracts. We represent policyholders in both litigation and non-litigation disputes, including various property and business interruption coverages. With or without earthquake coverage, Stoel Rives can assist in navigating the insurance waters, strategizing for the future, and getting your business back up and running.