A wildfire can disrupt or even shut down a business. Even if the company recovers, its customer base may not. An organization can lose customers if the area is highly damaged or perceived to be damaged. If the business has to close for a period of time, customers may have found alternate companies to fill the void.
Business owners feel helpless watching a wildfire encroach on their livelihood. They know what is at stake. As wildfire rages in California, there are both direct and indirect effects on organizations: There has been about 198,392 acres burned, 6,190 number of fire incidents, and 607 structures damaged or destroyed so far in 2019. Communication becomes essential to ensuring employee safety and sending out alternate work information.
- Property – Businesses with buildings in the path of a wildfire will be impacted. Even if a company doesn’t own property, if it has a physical location, it will be disrupted when evacuating or modifying work hours due to wildfire.
- Equipment – Any equipment located in the vicinity of a wildfire will be at risk. Your business will need to protect or evacuate this equipment.
- People: Even if an organization’s physical location is not at risk, some of their employees might be. If certain neighborhoods are threatened, damaged, or evacuated, a business could temporarily lose a good portion of its workforce.
- Labor Market – Wildfires will disrupt the labor market, which will have an impact on businesses. When employees are dealing with the aftermath of a wildfire, they may skip work, take leaves of absence, or use sick days to tend to their families and neighbors. They may even more out of the area altogether to start fresh.
- Transportation – Wildfires often make traveling in hard-hit areas difficult, shutting down roads and other transportation routes such as railways. Companies who rely on these roads for employee travel or transporting goods have to be patient while crews work to clear those areas from debris. Emergency and recovery vehicles may take over these routes for some time.
- Utilities – Even if a wildfire doesn’t threaten a power plant or sewage facility, it could pose a risk to the infrastructure supporting these utilities. Until crews can repair the damaged lines, many companies cannot operate, much less generate revenue to pay the bills.
All of these factors often lead to an increase in a variety of prices that trickle down to the consumer, from labor and wood/production costs to transportation costs. These extra expenses can be difficult to absorb for most businesses. Without proper reserves, a single wildfire has the potential to wipe out even the most well-established company. It is best to have a formal emergency response plan in place to safeguard your business’ future so you’ll be ready to reduce your losses and ensure your business’ long-term success.
ProAction Insurance Services can guide you through the whole recovery process to help you minimize the loss of revenue and customers, maintain your public image and clarify the critical decisions to be made during a time of crisis.