Wine Women event at Buena Vista Winery, June 17, 2019
Panel moderated by Chet Laws, Director of Business Development, InterWest Insurance Services
Ray Johnson, Executive Director, Wine Business Institute:
- A lot of wineries in Northern California and along the West Coast are NOT well prepared for emergencies such as fires and earthquakes, as the survey recently released by SSU has shown. This conclusion is not specific to the wine industry, however.
- Yet, it IS possible to be prepared and have a plan whether a disaster happens during or after working hours. Preparedness includes having a communication plan ready and, importantly, a succession plan if the company principals are taken out for what could be weeks.
ACTION POINTS: Please read materials on Emergency preparedness, including best practices from Turrentine Brokerage, and use the Preparedness & Resilience Checklist to make YOUR preparedness plan.
Shana Jones, CAL FIRE Sonoma-Lake-Napa Unit Chief:
- In 2017, there were 172 fires that broke out on one night, 18 of which became major fires. 12 of those fires were in Sonoma, Lake, Napa and Solano counties. Every single station, every employee of CalFire were deployed that night but fires were coming from everywhere.
- We had not seen these kind of fires before. Fire season is not a season anymore, it is year round. Were the 2017 fires the worst fires ever seen? Possibly. In 2017, there was a combination of factors: 7 years of drought and winds up to 80 miles/hr.
- The important message is: you have to be prepared for wildfires YOURSELF.
ACTION POINTS: go through the CAL FIRE’s checklist to prepare for the next wildfire. This checklist for homeowners lists what they need to do inside and outside of their homes. One important thing is to create a defensible space around buildings.
In addition to fire protection and public education, CalFire performs defensible space inspections and provides grants for vegetation management to communities, including city councils, HOAs, etc. Talk to CAL FIRE about these grants if interested.
Sonia Byck-Barwick, Paradise Ridge Winery:
- We were one of the wineries that lost practically all property – tasting room & events center, winemaking facilities, houses, etc – except for one shed.
- It is very important to us to make changes to the property, and we have developed a comprehensive plan. We have brought in sheep and are working with UC Davis on the grazing program, and we are creating a defensible space around winery buildings. When we bought the property forty years ago, it was a sheep ranch, so in a way, we’re going back to our roots.
Brendan Wright, Paragon Insurance:
- Wine industry has enjoyed suppressed insurance rates for a number of years. Insurance companies are now trying to bring insurance rates to levels more common in the marketplace, and also account for the catastrophic events that we’ve had since 2015.
- What usually happens after catastrophic events, such as 9/11 or Hurricane Katrina, is that rates go up significantly in the immediate aftermath and then settle at some happy medium level.
- Currently, the property market is constricting, a lot of players are getting out of this industry, while other companies, like Paragon, are seeing opportunities to capture market shares.
- For a couple years, the market will go through a rough patch. For businesses that have not changed the ways they do business (no acquisitions, etc), we expect rate increases from at least 10% to as high as 25%.
Katelyn Duarte, PHR Human Resources and Operations, Regusci Winery and Vineyard Management:
- The company has 350 employees between the winery and vineyard management businesses; 4/5 of whom live outside of Napa;
- We were dealing with concerns on several levels:
- saving the family property – because of the harvest time, we were fortunate to have people on the property on the night of the fires who together with the owner jumped on tractors and were cutting firebreaks around our property and neighboring property;
- looking out for clients’ property, which was challenging due to poor phone connections and difficulties getting there;
- addressing concerns of employees who commute to Napa during harvest: is there work for them? how bad is the smoke?;
- helping employees who are locals – some of them lost homes.
Janet Ruiz, Direct Strategic Communications for Insurance Information Institute (III):
- III is a 60-year-old company with the mission to help people to understand how insurance works. III works with various agencies including CAL FIRE, as well as media on education about insurance.
- Insurance industry offers various solutions to businesses, depending on business needs, such as coverage for employees, building replacement, lost income (e.g. events that had to be cancelled because of a catastrophic event), smoke damage, etc. It is up to each business to decide what coverage they need.
ACTION POINTS: talk to risk managers at insurance companies – they are a resource who can look at your business and help you to figure out what you need: pay employees so that they don’t leave, or take care of your valuable art collection, or something else? Risk managers have templates that you can follow.
Also, visit III.org for statistical information on various types of catastrophes. CAL FIRE website also has materials on insurance preparedness.
Tom Blackwood, Director of Operations, Boisset Collection:
- Buena Vista was very fortunate in the 2017 fires despite the fact that vegetation management around the winery is all but impossible. Our luck was resources: there were 10 fire trucks to fight fires and back burn the hillside when the fire got here, and a tank with 30,000 gallons of water, which was all used up.
- During the fires, communications became the key. How to get hold of hundreds of employees? Email was often not working, so texting seemed to be the easiest best way to get hold of everybody. How to keep employees updated on whether the business is open or not? In our case, certain properties were working, while Buena Vista was shut down. And for employees who unfortunately lost their homes, how to support them?
Additional questions, considerations and advice with input from several speakers:
Smoke damage – is it insurable?
- From the insurance perspective, it is important if the smoke effect was while grapes were ON the vine or OFF the vine. When grapes are on the vine, they’re insured by crop insurance, which is a government-subsidized program. This program is restrictive in coverages, and the issue for wineries is valuations behind the crop insurance. Generic pricing is set as a district average, but if there is a specific contract with a winery and the price is higher than that of the district’s, it is possible to enforce the policy and increase the price (it will however be reflected in the insurance program pricing).
- If grapes are off the vine, they are covered by a property & liability insurance program. If a winery has a bespoke winery insurance program, contamination coverage should be a part of it.
Contingency plans – what can we do today? Some concrete ACTION POINTS
- Find the risk plan that works for your business – there are many. Talk to risk managers at insurance companies;
- Store documents on Cloud – you may not have access to computers for days;
- Think about supply chain. Find a ‘sister’ winery in a different area where you can move events (planned weddings, etc) in case of emergency;
- Remember that embers can travel far – clean gutters, trim trees, put in the right kind of vents, close eaves, etc. A lot of buildings burn from the inside out. Also consider planting vegetation that is not susceptible to fires;
- Clear at least 5 feet of defensible space around the building, including mulch that can burn. Cleaning the space will also give space to firefighters;
- When you are asked to evacuate – get out quickly. For firefighters, lives are always priority #1. While lives are in danger, they will not focus on saving property – that is their #2 priority;
- Check out Local Assistance Centers for available disaster assistance programs and services;
- Check CAL FIRE Statewide Fire Map and Incident Information on CAL FIRE web-site for correct and up-to-date information on fires (and to avoid incorrect information that floats around);
- Have a supply of recommended face masks at the winery;
- Check websites mentioned above for more advice on contingency planning.
How can employers support their employees? Some examples & ACTION POINTS
- Be connected to employees, show them that you care about them as people;
- Make a database of employees’ home addresses, home and cell phone numbers, maybe even create a Google Map of where they live;
- Allow employees to cash out vacation time – some may face unexpected expenses;
- Be safe on the road!
- Give employees extra time off if they need it;
- Start a GoFund account for those affected by fires, which could be matched by the employer.