Lessons Learned from Recent Wildfires: Preparing for and Responding to a Disaster

As wildfire season approaches, developing a team of trusted recovery advisors prior to an event can save you time, frustration and money. The Greenspan Co./Adjusters International and California Fresh Fruit Association assembled a panel of these experts to share insights, tips and tools for business owners to prepare for wildfire season.

good morning everyone my name is Ian LeMay I have the privilege of serving as the president of the California fresh fruit association and I’d like to welcome our members and extend our thanks to our members who have joined us today for this webinar. California wildfires lessons learned the panelists today would like to make this webinar as interactive as possible so please use the q a box as you see on the bottom there to ask any general or specific questions as we move through the presentations and conversation today the California fresh fruit association is proud to partner with our associate members the Greenspan public adjusters rain and hail insurance companies and AJ Gallagher to bring this information to our members as we all have seen in the recent years California wildfires have significantly devastated many areas of the state and just last year had significant impact on air quality and the safety of our employees throughout the industry our panelists today are industry experts that will provide insight on how wildfires have affected their area of business and what we can expect for future wildfires um and other natural disasters that could threaten our state before jumping into some questions I would like to start off by having our three panelists introduce themselves and talk a little bit about their companies and their respective areas that they represent first up this morning is Caroline stevens with AJ Gallagher Caroline pass it over to you thanks Ian hi I’m Caroline stevens with Arthur J. Gallagher Gallagher is about a six billion dollar company with about 40 000 employees worldwide I’m part of the nationwide agribusiness practice at Gallagher and I’ve been here in our Fresno area for quite a long time and in the industry almost 30 years now so appreciate being part of this panel today look forward to talking to everybody and hopefully giving some insights of how you can better prepare for your renewals and your respective businesses and then I’m going to hand it over to Steve Severaid let him introduce himself good morning everybody thanks for joining us this morning my name is Steve Severaid I’m a principal at the Greenspan company adjusters international we are a public adjusting company many people don't know what that is essentially we are consumer advocates advocating for policyholders after they suffer a major property insurance claim and we have a lot of agriculture clients we've helped and we've had a lot of recent experience as a result of these wildfires which brings us to this topic today and I’m glad to be here thank you I’ll pass it on to craig thank you good morning everyone my name is craig Gonzalez I’m senior vice president with the California division for rain and hail insurance service LLC we are the largest rider of federal multi-apparel crop insurance in the US we're one of 15 private companies authorized by the usda risk management agency to write multi-parent crop insurance in the US also known as mpci and our Fresno division office services both California and Arizona so we handle all marketing underwriting claims out of the Fresno office and our parent company Chubb is the world's largest publicly traded property and casualty insurance company so with that I’ll turn it back over to Ian thank you all for your time today and bringing your expertise to this conversation just a note for our members who are viewing the webinar today we are recording this webinar and we'll be posting it in the coming days to our website and so for anyone who would like to view this again or send it to some of your peers please visit our website cafreshfruit.com so again appreciate our panelists and so we'll just jump into some questions that we have here first one let's just open it up to all panels here what would you say is the number one lesson your industry or company has learned from recent wildfires in California that we experienced just this last summer Caroline how about we jump to you sure thanks um I think probably one of the biggest lessons is that you really have to be flexible and you have to really pivot on whatever the latest issue is before we got started today we were talking about just everything that's hitting our clients today whether that be input costs corrugated insurance costs you know really being able to be flexible restructure programs if needed re-look at what you're doing I think covet has taught us that this last year too that you really have to put a whole different lens on and look at your business and do things differently than you've ever done before

take it around the horn Steve thanks Ian well I would say if we haven't learned anything else from the number of recent wildfires and disasters and this changing climate and it would be to be prepared these things are happening more and more they're going to continue to happen and everybody should be prepared and by be prepared I mean understand your insurance talk to the Carolyn stevens of the world make sure that's right have it have a cloud operation set up with photos and videos of your whether it's your home or whether it's your business property you know have all that stuff ready to go in the cloud keep all those things to the side so if something should happen you're better prepared and I think we've learned that that's a really important lesson that a lot of people a lot of our clients weren't prepared and didn't have those things set aside or prepared to be ready to go and they had more difficulty recovering as a result of not being prepared craig how about your thoughts you know I’d really echo what Caroline and Steve said and being prepared you know preparation is key and in the crop insurance sense I would I would suggest that having your coverage in place annually not gambling on what year to take it out not gambling on what coverage level to take out for that year because you know the reality is you know that the year you do that you're gonna get hit right that's just kind of how things work so um to put it in place annually expense it I mean if you got to look at it as a five gallon bucket so be it look at it in that sense and you know have it in place on an annual basis and you know it's there for your protection and ultimately mitigate your risk because who knows what's coming down the pike in

great points by all let's go to Steve when are grapes covered by a company's business insurance policy and when are they not what are some of the things that we've seen in recent fire events where businesses didn't have enough coverage it's a great question there's there has been a lot of confusion about that by especially with the wine because a lot of wineries lost their grapes and lots of facilities as a result of these recent wildfires and they really weren't sure where they were covered when they were covered when the grapes are on the vine that goes to Greg’s point you'd have to have crop insurance otherwise in almost all instances you're not covered under your business insurance policy the grapes are covered once they come off the vine and they hit your facility whether they're processed or not processed they become part of your insured property but what we found is we found some people in these wildfires that had picked the grapes before they were evacuated the grapes were sitting in tanks or sitting and getting prepared to put into tanks and then they had to leave and smoke came through fire came through etc. and they were covered under business owners policy others ran off before getting the grapes off the vines and had no coverage for those grapes even though they were completely destroyed so they were in a much worse position so it's important for people to know that if they hit your facility they're picked they hit their facility in your process whether they've been processed or not they're still covered properly but up until that point they're excluded from coverage under your business owner's policy

interesting well that that's a good segue sorry no that's a good segue to Caroline can a company that may not have or be in a fire area still get coverage for their property yeah I think um definitely and really just real quick to kind of add on to what Steve was saying about coverage you really do need to look at your coverage depending on what carrier you're with the type of coverage you have in place like Steve said if it's still on the vine it's not going to be covered and then there's different valuations as you get to different types of policies out there whether it's selling price once it's been picked or whether it's just um you know replacement cost and you know raw work in progress so really paying attention to what is the valuation of your um you know of your grapes of the of the wine of the juice at different stages it becomes really important and it does vary by carrier out there um as far as the question as of you know if you're in a fire area can you still come get coverage yes you definitely can again it's that flexibility and looking at different ways of ensuring some of that traditional property you've done one way may have to be split up and done very differently this year so um you should be looking at very various different alternatives whether it's you know stock being pulled out of the package program maybe it used to be pulled out and it was on a stock throughput policy and now it's coming back into the package because you can't get a stock throughput policy I was just on the phone with one of our stock experts yesterday and they were saying one of the things you have to look at is being really specific where do you need that stock coverage what locations um are there certain locations that you can really look and identify okay maybe I don't need you know a million dollars there I only need three hundred thousand dollars there so structuring the policy is going to get you the coverage that you need rather than just saying I want you know in years past I want a big giant blanket limit and I need to have it all covered under one policy it's not going to happen like that anymore so again being flexible and working through some different ways of ensuring that is going to get you the best results to just tack onto what Caroline said we had a couple of blind clients in these fires that they had kind of changed their operations around and stored wine in different places you know they had them in the American canyon and they had that all covered but then they had moved and sort of changed things around with covet and they started storing a lot more wine sort of at the farm and they had no coverage for that wine and they lost you know hundreds of thousands of dollars’ worth of wine so to Caroline’s point really important that you're paying attention to where you're keeping your wine and that it's a covered address for that line so I just unfortunately saw some people that weren't paying enough attention to that that really got burned pardon the pun puns are always welcome craig going to you multiple apparel crop insurance what crops are covered by mpci so I think I’ll a great question in and I’ll touch on what is multiple apparel crop insurance mpci as it's known for on the crop insurance world we seem to love acronyms so it's federally subsidized it's broadly available throughout the US in some of the benefits of mpci it's flexible growers can tailor their coverage you know to fit their the specific needs of their operation it's affordable the federal government actually subsidizes the premium it's readily available and by that I mean the private sector controls the delivery and it's competitive and that translates to localized service for growers and finally it's predictable you know up front unlike ad hoc disaster payments crop insurance is very predictable and the growers the banks what not know upfront what their coverage is those are some of the benefits of mpci crops I think we're well over 60 crops now covered by traditional mpcien in California and that number seems to increase every year some of the crops would include stone fruit table grapes cherries blueberries almonds is the largest crop written in California as you can probably imagine you can purchase mpci by the sales closing date now for 2021 that deadline is passed by crop county but as an example January 31st was the sales closing date for stone fruit cherries and table grapes yeah this season's upon us we're only a couple weeks away so makes sense Caroline coming back to you how can a business prepare for renewals are there any alternative options for them if they're in a fire area yeah no that's a great question um I think the best thing we were kind of the theme of today is be prepared and a lot of that is really you know building those strong relationships whether it's with your carrier with your broker with your business partners like Steve and his team really um knowing what you have where it's located um start early so you know start the preparations early we have mid-year stewardship reviews you know with our clients well in advance of the renewal to know what's going on what are the challenges that they're seeing this year and updating them on the market and helping them budget for what's going to hit in six months you know um so really to again start early at least six months out and then really be very detailed again the devil is in the details on um your locations your values there's a lot of modeling that's going on with insurance companies right now really looking at are you really in a fire area you know what's your water source what's close by all that detail really helps prepare and put the client in the best position in front of the insurance company so valuations modeling business income worksheets no one likes to fill those out we've been able for years to get away without having to submit those to carriers and those are becoming incredibly critical so I would say that's a really big thing is looking at if something were to happen we've seen those kind of losses happen in the industry out there what would happen to our operations what would we need to do to keep things moving and keep our business going so that's going to be really critical in getting that together and then probably the last thing would be making sure that you are really addressing any kind of carrier loss control recommendations so if you've had carriers go out there and say you really need to you know move pallets away from here you need to have your normal sprinkler system upgrades or updates making sure that those are all taken care of while in advance of the renewal is really going to help you get the best result out there

and I guess going a bit off script here for all three of you last year California of course saw devastating wildfires in my lifetime I don't ever remember long-standing you know orange skies across the state um are you seeing more engagement from clients or with questions around wildfires and insurance coverages or is it are you still feeling that the engagement is coming from the carrier to the client

um you know I think we I mean we have a lot of engagement direct with our clients and our job is to prep them for what the carrier's going to expect so I feel like that's again the job as a broker is to make sure that we're well preparing our clients working with the right partners to get that information together and putting them and presenting them to the carrier in the best light that we can do so our engagement is direct with our clients and then we're again kind of that go between we know what the carriers are looking for we know what data is going to enable them to make a better decision on our client so it's working that side of it too so it is really um on both sides I can tell you Ian from our standpoint we're in a different space than Carolyn as advocates after an event happens but we've had a record number of inquiries from people who were in or around the wildfire who weren't necessarily affected or lightly affected but it's really been a light bulb moment for a lot of those people inquiring for us as to you know what we see from claims and what they should be doing as they're interacting with brokers like Carolyn so I would say that yeah people are a lot more in tune with this and it's become a lot more of a reality in people's minds other than you know usually in the old days people bought insurance because they had to and they just thought it was something they had to do as part of the business but now I think people are starting to appreciate and craig probably appreciates this too because a lot of people didn't have crop insurance and now they're the ones who did are looked as the is the smart ones you know but I think people are paying a lot more attention even people who didn't suffer losses are

yeah I mean 2020 taught us growers a lot about crop insurance the value particularly for wine grapes that smoke cane is covered due to wildfire and taught a lot of those that didn't have coverage how important it is and how critical it is and maybe I can back up a step and talk a little bit about what does multi-pro crop insurance cover crop insurance as most people call it so to speak it protects basically against unavoidable natural occurring events so in generally speaking weather-related perils such as rain heat freeze hail wind etc. some California crop policies very few but some cover or include revenue but that's the exception so yes is wildfire covered absolutely and again it taught us taught a lot of people a whole lot in in 2020 and we experienced tremendous growth for this year in in many of the wine grape growing regions of California accordingly as you can imagine so but again wildfire yes it is covered direct damage from wildfires covered as well as smoke taint due to wildfire which we experienced a lot of that last year smoke tank actually from wildfire adversely impacts wine grapes and particularly in certain parts of California last year so that aspect is absolutely covered the key is performing tests via independent labs to confirm that certain smoke tank markers are in fact found in the berry sample it's probably never put it craig go into any other commodities beyond wine grapes such as tables raisins stone fruit anything like that not yet in but I mean that's obviously an excellent leading question and again kind of back to my original point of preparation because um you know here we go again right we're in a drought year perfect conditions granted a lot of the fuel has been burnt but um I got to believe that there's still quote unquote fuel out there and once again we're dry so here we go again thanks Steve going to you if a member has an older building on their farm and a fire occurs how are they covered what options does the business have so we saw a few of these we have some clients we had one client after the fire that had bought some vineyards adjacent vineyards and sort of grew and took over and with those vineyards came some farmhouses or different dwellings and different buildings that they sort of inherited they didn't build them or necessarily want them or need them they found uses for them and then the fires happened and they said well what am I going to do with soul building I’m not going to rebuild it but they're still entitled to the what's called the actual cash value of those buildings even if they don't rebuild they still have value and they should still make sure they're insured fortunately for one of these clients they had a large blanket policy that covered all their buildings so they had plenty of coverage but some of those older buildings those historic buildings that were built a long time ago are very valuable they're more expensive to build the new buildings so understanding that value and making the most of it we have one clients actually taking four of those buildings that were lost and building one big building that has a better use for them but they're able to capture the value from these four smaller buildings and actually build out a facility as a result of being properly covered and paying attention to how they can make that work so it's when you're looking at your farm and you're looking at some inherited buildings those can have a lot of value a lot more than people because they don't buy they don't buy that land for those buildings they buy them for the land but it's easy to sort of discount them but after a fire they could become something that can really be a something positive out of something really tragic of being able to use that and put a nice facility or do something to inhere enhance your property or your business and then also on the counter side of that which Caroline can probably speak to we have also had clients that did that buying of different lots and sort of combining them and then they weren't properly identified in the coverages of the insurance policy the lots weren't properly you know connected to the policy and you call them the addresses or the lots or whatever and so they had areas of their farms that had no coverage at all no coverage for anything because they weren't properly identified in the insurance policy and that's why you really need somebody who understands ag and understands placement of coverage and making sure that there are no holes if you're if you're buying and enlarging your footprint because we did and have a couple of clients that ran into that problem and had zero coverage of part of their farm which they thought they were fully insured for so you know obviously that brings into a whole another realm of discussion with carriers but you don't want to be in that position yeah that's a really good point I think really understanding where those assets are and making sure you've got a good track of them and then also see very much what you're saying some of these buildings you know some are insured at actual cash value some are insured at replacement cost valuation what would it cost today to rebuild that building even if it was 50 years old um and some of them can be stated value for historical buildings and things like that that are very unique or have a unique you know um architecture to them so it really is again kind of getting back to those details understanding where they are keeping track of them and what does the business want to do with them if something were to happen great points Caroline before we opened up the conversation today you and I were talking about some increases in pricing obviously topic today being wildfires on everyone on the zoom here is also familiar that covid brought a whole new realm of of hurdles for the industry to jump over can you touch on on what our members should be seeing or should it be expecting out there with regards to price increases yeah that's great I um unfortunately with you know all the not just fires but you look at the storms in Texas that are impacting a lot of our clients you know all the hurricanes using the Greek alphabet because they ran out of names you know last year it really it really all ties back to this is all hitting the insurance industry and insurance is one big pool of people and resources and when some things get gets hit in one area whether it be wildfires specific to California or it's Texas storms or hurricanes in in Florida they're all impacting our clients no matter where they're located so um the industry and same thing in crop insurance I mean Chubb is a huge insurer we work with them all the time they have crop insurance they have business insurance but they also use the same reinsurers that are on all these different catastrophic events out there so I think the biggest part of our job right now that we've had for this last year at Gallagher is really you know prepping our clients really helping them budget for you know look what we're going to be seeing um property rate increases and again it varies by size of client it varies by industry it'll vary by the you know where they're located but we're seeing you know everything has basically gone up so property rates are up significantly auto rates continue to be up even though you'd think that not as many people are driving around and people might have gotten rebates on their personal insurance but commercial rates are still going up because of years of large losses and casualty in the excess umbrella side has really been hit hard that's probably where we've seen the biggest impact on our clients so they're getting hit not only from the inputs like increased cost of corrugated materials but you know they're also getting hit with these you know large insurance costs so the best thing we can do is to work with them early and budget by line of coverage what we think those increases are going to look like and then again prepare looking at the different things we talked about the modeling the valuation changes to structure to really try to minimize those increases as much as we can at renewal that's great that's great well I really appreciate all three of us your time today I I’ll kick it back to each of you on any closing thoughts you that might like to to touch upon and share with our members and as a reminder to those who are viewing the webinar today all three of our panelists today are are your peers of cfa members you can find their contact information in our rot in the cfa roster and if you need additional contact information always please feel free to reach out to cffa staff whether that be myself or Courtney razer who is also on the webinar today we are always happy to connect our members to their peer members so kick it back Steve would you like to start on maybe closing comments yeah sure thanks first of all thank you Ian and thank you Courtney and the California fresh food association for hosting this event and I would say that what people should be doing now is they should be developing their team for post-disaster recovery and they should be doing it now rather than scurrying around after disaster strikes and trying to figure out how to assemble the best claims team how to deal with everything what they should be doing put a plan in place now have a disaster plan coordinate with your broker interview and choose a qualified public adjuster such as Greenspan to to be in place before anything happens and hopefully nothing will ever happen but the better prepared you are and spending a little time on the front end will make when it's crazy and I can tell you after these wildfires our phones were ringing off the hook we couldn't possibly handle everything that was coming through the door we had to be kind of selective in order to give good service to the people we helped the people that already have relationships with us they're automatic they're in and we already know them they already know us and it makes recovering from disaster more efficient more and also with better results so I would say get your team together get a disaster plan in place coordinate your public adjuster and your broker as a team together not competing with each other but helping to have the best plan in place in case there is a disaster and I hope for the people on this this webinar that doesn't happen to them but as we've seen it does happen so that's my closing comments thank you Steve craig how about over to you yeah thank you Ian Courtney my fellow panelists and of course California fresh food association I would simply say for those of you with coverage be sure to review your coverage review your summary of coverage when you get that issued also known as a deck page in the pnc world review your coverage make sure it's right make sure everything's accurate secondly in the event you experience weather issues some sort of potential loss maybe you don't think there's going to be a loss but something happens out there in terms of a covered peril let your agent know turn in a notice of damage it puts us on notice it gives us a chance to go out inspect verify and it meets the requirements of the policy because it is a federal regulated and subsidized policy so there are certain federal requirements that we absolutely must meet um and lastly if you do not have coverage please reach out to your agent and ask that you know inquire at this at this point that way you're in line for next year and certainly a bit of marketing I’ll Steve here um please ask for rain and hail insurance because it's your agent's choice as to where they place you so with that again thank you thanks craig Caroline great well thanks Ian and Courtney and the California fresh fruit association um and and the panelists you guys were great today um I think the key theme here continues to be be prepared if there's a big kind of tagline from it that's probably what it is and also I think you can tell by the panelists here is make sure you're contacting your experts because you know craig and Steve they're experts in their area I know with Steve we've worked with Greenspan with our clients and you want the best people working for you and representing you well in the market so think about that when you're making your choices of who you're out there talking to working with on a regular basis so be prepared start early and um use those resources that are out there for you that the association is graciously put together so that's fantastic again thank each of you for your time today thank you for your continued support of the California fresh fruit association we can't do our job in advocating on behalf of the fresh fruit industry of California without each of your support and again as I stated earlier we have been recording this webinar today and we'll be posting it on our website in the coming days so please if you would like to share we'll make that available to our membership and here in 2021 while we didn't get to engage directly with our membership in 2020 we're eagerly moving through our color schemes of state mandates and look forward to being with all of you in person in the in the coming months so please stay safe stay healthy and as always please reach out to the fresh fruit association with any questions or concerns you have thank you everyone for your time