As I sat down to write this at the end of July 2020, we were marching on into the middle of summer and entering wildfire season. Already this year, three times as much land has burned in Arizona (where I live and work), as compared to the same timeframe in 2019. This is largely due to the prolonged drought conditions and extremely hot temperatures we’ve been experiencing. For businesses in Phoenix, the Bush Fire northeast of the city came very close to commercial and residential areas. Businesses and residents across outlying towns in Gila and Maricopa counties were ordered to evacuate.
Thankfully, firefighters put out the wildfire before it reached Phoenix, although in the end some 193,000 acres burned—a stark reminder of the ferocity of natural disaster events and their potential financial impact. July 20, 2020 marked 100 days without any measurable rainfall in Phoenix, continuing what the National Weather Service called a “mega-drought.” [We did finally get some rain in Phoenix on July 24.] The possibility of another devastating wildfire is on many people’s minds.
Much of the Southwest is experiencing extreme drought conditions brought about by the longest stretch of parched weather the region has seen in hundreds of years. Other parts of the country, extending from the Pacific Northwest into the Northern and Central Rocky Mountains and the Great Basin, also face what the National Interagency Fire Center (NIFC) regards as “significant” wildfire potential.
The states of Washington, Oregon, Idaho, Montana, and others are encountering “areas of intensifying and expanding drought,” causing “above normal” and “large” wildfire risks, NIFC stated. Combined with growing development in the region’s wildland-urban interface, the threat to people and property is fast-increasing.
Commercial enterprises in these regions are at risk of substantial property damage and, as a result, prolonged business interruptions. The good news is they can make proactive decisions now to facilitate the protection of life, property and natural resources. Here are a few best practices to consider:
These are just a few risk management tips to reduce the potential business impact of wildfires. Preparedness is essential, as the month of July is typically the entry point into the worst of the Western fire season.
To learn more, Chubb has published a wildfire prevention document specifically for commercial enterprises.
Chubb has a team of risk engineers who can provide customized recommendations to clients; to learn more, contact your Chubb underwriter or find an agent near you.
David Hart is Vice President and Phoenix Branch Manager for Chubb.
The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.