Commercial Fire Insurance Scrutinized, As Wildfires Hit Areas Formerly Considered Safe

The fire that struck in Boulder County, Colorado, late in December was the most damaging in the state’s history, destroying hundreds of structures, including retail office buildings, a major shopping center and a hotel. Insured losses likely approached $1 billion, according to a post from law firm Anderson Kill. “The fire’s extraordinary intensity and unpredictable, off-season onset should constitute a wake-up call to all businesses to review and assess their property insurance policies and make sure they understand the full range of coverage that may apply if fire strikes their premises or the surrounding area,” say the writers.

That coverage may go beyond what’s often considered fire insurance. This post includes a brief discussion of some coverages that may apply: Business interruption – which can be triggered even when there is no physical damage to the property – as well as “extended” business interruption coverage; contingent business interruption coverage; civil authority coverage; “ingress-egress” coverage; and so-called extra-expense coverage.

“Calculating the full range of business income loss from property damage, disruption of the surrounding area, and closures by order of civil authority is a complex task.” the authors write “The more thorough the documentation, the more likely the policyholder is to receive full or near-full acceptance of the claim.”