Fort McMurray Wildfires: Claims and Risk Management Considerations

The wildfires currently raging in the Fort McMurray area may become the costliest catastrophe in Canada’s history. With an estimated 400,000 acres burned, more than 90,000 people evacuated, hundreds of homes and structures damaged, and local commerce ground to a halt, the economic impact is expected to total in the billions of dollars.

With current weather conditions favorable to containing the wildfires, the first inspections of the damage by government representatives and others will be taking place. How soon businesses and residents will be allowed to return remains unclear.

During and after the wildfire or a similar catastrophic event that causes significant business interruption and creates dangerous conditions for business recovery, acting as quickly as possible is essential to your employees’ well-being, business operations, and bottom line.

The following are immediate actions that should be considered:

Business and Employee Actions

1. Implement your disaster recovery plan and monitor local authorities.
2. Stay away from your business or home until told it is safe to return.
3. Account for all employees and notify them of next steps in regards to humanitarian assistance, time off work policies, and expected return to work timetables.
4. Use extreme caution around trees, utility poles, and other tall objects that may have become unstable.

Claim-Related Actions

1. Inform your insurance broker immediately in the event of any actual or potential physical, ingress/egress, civil authority, service interruption, or time element losses. 
2. Document physical damage before beginning cleanup efforts – taking photographs can be helpful.
3. Keep damaged items unless they pose a health hazard.
4. Keep detailed records of:

• Any order by civil authority mandating evacuation of your premises (a copy of the order is best).
• All road closures that prevent or prohibit access to your premises.
• Losses of service, including the specific reason for the loss of a particular service.

          5. Obtain copies of all records or periodicals, including maps and photographs, that may support any claims.

          6. Engage external claims management and advocacy resources, as needed, to help you manage complex insurance claims.

In addition, if there is any impact to your supply chain or to customers that may result in a contingent time element claim, the above information as well as documentation of the upstream or downstream contingent issues should be gathered as soon as possible, before information becomes harder to obtain.

Early steps such as these and a proactive response can help you ensure the health and safety of your employees, recover your business, and protect your liquidity under trying circumstances.