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What California Wineries Need to Know Now to Prepare for Fire Season

April 28, 2021 Articles
North Bay Business Journal

California is at the start of another dry year, with increased likelihood that the North Bay will experience another active fire season.

Fires are always a risk and they are always unpredictable — preparing in advance can help prevent damage, mitigate loss, and reduce stress.

Protect your physical space

It is important that structures be built or retrofitted with fire-resistant building materials — this is often referred to as “hardening” a building.

It is also crucial to maintain 100 feet of defensible space around the whole perimeter of any building. These precautionary steps are best taken now when labor and building materials are easier to access and available at a lower price.

CalFire and Napa Firewise both have great resources on hardening buildings, creating defensible spaces, and general preparedness.

Make an evacuation plan

Every home and business should have a detailed plan that lists the steps to be taken to protect people and property in the event of an evacuation.

Take the time now to meet with your family members and employees and think through the different evacuation scenarios that could occur during the year. Make sure that all employees, including seasonal employees, are familiar with and can access the evacuation plan.

Some wineries find it helpful to develop an evacuation checklist for each of the main stages of production.

Consider updating insurance limits

Work with your insurance broker to review your policy limits and ensure they are sufficient to cover potential losses after a fire.

Following a wildfire or other natural disaster, construction costs can increase significantly due to heightened demand for materials and labor. This can mean that insurance limits that are adequate during normal times become insufficient to cover actual rebuilding costs.

Also, keep in mind that building costs rise every year and the limits you negotiated when you bought a property may no longer be sufficient. If necessary, increase your insurance limits now.

Understand the process for making an insurance claim

For vineyard owners, it is crucial to review your crop insurance policy in advance of a potential natural disaster and understand the process for making a claim.

Some crop insurance policies require that a grower submit initial information about a potential claim shortly after the event that gives rise to the claim (in many cases, 72 hours).

This requirement can be overlooked because smoke taint is often not detectable until the grapes have been made into wine, so the grower does not know there is a loss.

In the event of a fire, be sure to timely file any paperwork necessary to preserve a claim — it is always possible to drop the claim if it turns out the fruit was not actually damaged.

It is also important to review your insurance policies to determine what supporting materials you need to file a claim.

For smoke taint claims, for example, policies often require information regarding the location of the grapes, when they were affected, and for how long.

Many insurance companies also require lab tests to confirm the presence of smoke taint and some will only accept results from preapproved labs.

If the grapes are crushed, some policies require that juice from different lots be segregated and will not cover affected juice if it is mixed. Generally, it is advisable to keep track of blends, additions, and any measures taken to reduce the possible effects of smoke taint.

Review your grape purchase contracts

Whether you are a grower or winery, it is critical to understand what your grape purchase agreements say about accepting and rejecting fruit, who makes that determination, and what supporting evidence is required.

If you have the opportunity, you should consider amending existing agreements to clarify the process — clarity benefits both parties.

You should also be mindful of these issues when negotiating new agreements. Similar concerns apply to vineyard leases where rent is determined based on harvested tonnage.

Develop a plan for working through the smoke

Before fire season starts, develop a staffing plan that accounts for employment issues related to fires. OSHA and other regulations governing employee well being apply to employees who need to work in very smoky or otherwise hazardous conditions, including obligations to provide PPE. Employees with health conditions may also be able to request accommodations.

In addition to employment law requirements, you could encounter logistical obstacles such as power outages, evacuation orders, and road closures.

If you have a generator, ensure it works and that you have any required permits and sufficient fuel.

If you do not have a generator, consider buying or renting one.

Also, understand the process for obtaining access permits in a mandatory evacuation zone. Although it is impossible to plan for everything, developing a staffing and operational plan now with these contingencies in mind will better position you for a smooth continuation of operations.

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